Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Jul. 28, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | Ophthotech Corp. | |
Entity Central Index Key | 1,410,939 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 35,942,879 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 |
Unaudited Balance Sheets
Unaudited Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 140,917 | $ 133,930 |
Available for sale securities | 55,525 | 155,348 |
Due from Novartis Pharma AG | 674 | 3,531 |
Prepaid expenses and other current assets | 2,738 | 3,078 |
Total current assets | 199,854 | 295,887 |
Property and equipment, net | 1,888 | 3,281 |
Other assets | 46 | 462 |
Total assets | 201,788 | 299,630 |
Current liabilities | ||
Accrued research and development expenses | 12,687 | 47,240 |
Accounts payable and accrued expenses | 6,268 | 12,032 |
Deferred revenue | 6,646 | 6,646 |
Total current liabilities | 25,601 | 65,918 |
Deferred revenue, long-term | 200,007 | 203,330 |
Royalty purchase liability | 125,000 | 125,000 |
Total liabilities | 350,608 | 394,248 |
Stockholders’ deficit | ||
Preferred stock - $0.001 par value, 5,000,000 shares authorized, no shares issued or outstanding | 0 | 0 |
Common stock - $0.001 par value, 200,000,000 shares authorized, 35,932,179 and 35,733,276 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively | 36 | 36 |
Additional paid-in capital | 515,615 | 504,517 |
Accumulated deficit | (664,285) | (598,959) |
Accumulated other comprehensive loss | (186) | (212) |
Total stockholders’ deficit | (148,820) | (94,618) |
Total liabilities and stockholders’ deficit | $ 201,788 | $ 299,630 |
Unaudited Balance Sheets (Paren
Unaudited Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 35,932,179 | 35,733,276 |
Common stock, shares outstanding (in shares) | 35,932,179 | 35,733,276 |
Unaudited Statements of Operati
Unaudited Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement [Abstract] | ||||
Collaboration revenue | $ 1,661 | $ 28,198 | $ 3,323 | $ 43,919 |
Operating expenses: | ||||
Research and development | 15,657 | 48,262 | 47,636 | 86,032 |
General and administrative | 8,552 | 10,489 | 21,711 | 25,185 |
Total operating expenses | 24,209 | 58,751 | 69,347 | 111,217 |
Loss from operations | (22,548) | (30,553) | (66,024) | (67,298) |
Interest income | 344 | 446 | 722 | 892 |
Other loss | (1) | (98) | (22) | (68) |
Loss before income tax provision (benefit) | (22,205) | (30,205) | (65,324) | (66,474) |
Income tax provision (benefit) | (1) | (260) | 2 | (228) |
Net loss | $ (22,204) | $ (29,945) | $ (65,326) | $ (66,246) |
Net loss per common share: | ||||
Basic and diluted (in dollars per share) | $ (0.62) | $ (0.85) | $ (1.82) | $ (1.88) |
Weighted average common shares outstanding: | ||||
Basic and diluted (in shares) | 35,858 | 35,392 | 35,831 | 35,324 |
Unaudited Statements of Compreh
Unaudited Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (22,204) | $ (29,945) | $ (65,326) | $ (66,246) |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on available for sale securities, net of tax | 36 | (122) | 26 | 355 |
Other comprehensive income (loss) | 36 | (122) | 26 | 355 |
Comprehensive loss | $ (22,168) | $ (30,067) | $ (65,300) | $ (65,891) |
Unaudited Statements of Cash Fl
Unaudited Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Operating Activities | ||
Net loss | $ (65,326) | $ (66,246) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation | 1,393 | 352 |
Amortization of premium and discounts on investment securities | 137 | 331 |
Deferred income taxes | (8) | 22,853 |
Share-based compensation | 11,052 | 16,641 |
Changes in operating assets and liabilities: | ||
Due from Novartis Pharma AG | 2,857 | (25,808) |
Income tax receivable | (52) | (20,863) |
Prepaid expense and other current assets | 392 | 187 |
Accrued interest receivable | 275 | 147 |
Other assets | 416 | (3) |
Accrued research and development expenses | (34,553) | 6,331 |
Accounts payable and accrued expenses | (5,764) | (4,249) |
Deferred revenue | (3,323) | 364 |
Net cash used in operating activities | (92,504) | (69,963) |
Investing Activities | ||
Purchase of marketable securities | (12,014) | (12,003) |
Maturities of marketable securities | 111,459 | 50,500 |
Purchase of property and equipment | 0 | (149) |
Net cash provided by (used in) investing activities | 99,445 | 38,348 |
Financing Activities | ||
Proceeds from stock option/employee stock purchase plan exercises | 46 | 3,808 |
Net cash provided by financing activities | 46 | 3,808 |
Net change in cash and cash equivalents | 6,987 | (27,807) |
Cash and cash equivalents | ||
Beginning of period | 133,930 | 221,861 |
End of period | 140,917 | 194,054 |
Supplemental disclosures of non-cash information related to investing activities | ||
Change in unrealized gain (loss) on available for sale securities, net of tax | $ 26 | $ 355 |
Business
Business | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business | 1. Business Description of Business and Organization Ophthotech Corporation (the “Company” or “Ophthotech”) was incorporated on January 5, 2007, in Delaware. The Company is a biopharmaceutical company specializing in the development of novel therapeutics to treat ophthalmic diseases, with a focus on orphan and age-related retinal diseases. The Company currently has two product candidates, Zimura® (avacincaptad pegol), an anti-complement factor C5 aptamer, and Fovista® (pegpleranib), an anti-platelet derived growth factor, or PDGF, aptamer. Prior to 2017, the Company's primary focus was on developing Fovista and Zimura for various types of age-related macular degeneration, or AMD, which is a disorder of the central portion of the retina, known as the macula, that may result in blindness. In December 2016, the Company announced that two of its three pivotal, Phase 3 clinical trials for Fovista in combination with the anti-vascular endothelial growth factor, or anti-VEGF, drug Lucentis® (ranibizumab) for the treatment of wet AMD, failed to meet their primary endpoint. The Company announced in early 2017 that it had engaged a financial advisor to assist it in reviewing the Company’s strategic alternatives, including identifying potential business development opportunities. Also beginning in early 2017, the Company undertook a reassessment of its development plans for Zimura and Fovista, which included an evaluation of the scientific rationale for potentially developing these product candidates in one or more other ophthalmic indications for which there is a high unmet need. On July 26, 2017, the Company announced that it is pursuing a strategy to leverage its clinical experience and retina expertise to identify and develop therapies to treat multiple ophthalmic orphan diseases for which there are limited or no treatment options available. To this end, the Company plans to initiate a randomized, controlled clinical trial of Zimura as a monotherapy for the treatment of Stargardt disease, an inherited retinal orphan disease causing vision loss during childhood or adolescence, before the end of 2017. In parallel, the Company is continuing its on-going programs in age-related retinal diseases, including its ongoing Phase 2/3 clinical trial of Zimura as a monotherapy for the treatment of geographic atrophy, or GA, a form of dry AMD, and its wet AMD program for Zimura. The Company will continue to reassess the Zimura GA development program in light of the results of a competitor’s Phase 3 clinical trials of a complement inhibitor being studied for the treatment of GA, which are expected to be available during the second half of 2017. The Company is also continuing its business development efforts to identify and potentially obtain rights to additional products, product candidates and technologies that would complement its strategic goals as well as other compelling ophthalmology opportunities. The Company's third, pivotal Phase 3 clinical trial of Fovista in combination with the anti-VEGF drugs Eylea® (aflibercept) or Avastin® (bevacizumab) for the treatment of wet AMD, referred to as OPH1004, also remains ongoing with initial, top-line data expected by the end of the third quarter of 2017. The Company's strategy for its Fovista wet AMD development program will be primarily determined based on these data and in the context of its other two failed Phase 3 clinical trials. The Company believes that the failure of its two prior Phase 3 trials and the failure of a competitor’s Phase 2 trial investigating the combination of a PDGF inhibitor and a VEGF inhibitor are indicative of a low likelihood of success for OPH1004. As a result of the Company’s ongoing reassessment of its development programs and potential business development opportunities, the Company may modify, expand or terminate some or all of its development programs or clinical trials at any time. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited financial information as of June 30, 2017 and for the three and six months ended June 30, 2017 and 2016 has been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. The December 31, 2016 Balance Sheet was derived from the Company’s audited financial statements. These interim financial statements should be read in conjunction with the notes to the financial statements contained in the Company’s Annual Report on Form 10-K (“Annual Report”) for 2016 , as filed with the SEC on February 28, 2017. In the opinion of management, the unaudited financial information as of June 30, 2017 and for the three and six months ended June 30, 2017 and 2016 , reflects all adjustments, which are normal recurring adjustments, necessary to present a fair statement of the financial position, results of operations and cash flows of the Company. The results of operations for the three and six months ended June 30, 2017 and 2016 are not necessarily indicative of the operating results for the full fiscal year or any future period. Segment and geographic information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating and reporting segment. Use of Estimates The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and judgments that affect the amounts reported in the financial statements and accompanying notes. The Company bases its estimates and judgments on historical experience and on various other assumptions that it believes are reasonable under the circumstances. The amounts of assets and liabilities reported in the Company’s Balance Sheets and the amount of expenses reported for each of the periods presented are affected by estimates and assumptions, which are used for, but not limited to, accounting for research and development costs, revenue recognition, accounting for share-based compensation and accounting for income taxes. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of 90 days or less when purchased to be cash equivalents. The carrying amounts reported in the Balance Sheets for cash and cash equivalents are valued at cost, which approximates their fair value. As of June 30, 2017 , the Company had cash, cash equivalents and available for sale securities of approximately $196.4 million . The Company believes that its existing cash, cash equivalents and available for sale securities as of June 30, 2017 will be sufficient to fund its operations and capital expenditure requirements as currently planned for at least the next 12 months. Available for Sale Securities The Company considers securities with original maturities of greater than 90 days when purchased to be available for sale securities. Available for sale securities with original maturities of greater than one year are recorded as non-current assets. Available for sale securities are recorded at fair value and unrealized gains and losses are recorded within accumulated other comprehensive income (loss). The estimated fair value of the available for sale securities is determined based on quoted market prices or rates for similar instruments. In addition, the cost of debt securities in this category is adjusted for amortization of premium and accretion of discount to maturity. The Company evaluates securities with unrealized losses to determine whether such losses, if any, are other than temporary. Revenue Recognition Collaboration Revenue Prior to 2014, the Company had not generated any revenue. In May 2014, the Company received an upfront payment of $200.0 million in connection with its licensing and commercialization agreement with Novartis Pharma AG, (the “Novartis Agreement”), which has not been recorded as revenue due to the Company's right to terminate the agreement and associated obligation to repay the upfront payment under certain circumstances. In each of September 2014 and March 2015, the Company achieved a $50.0 million enrollment-based milestone, and in June 2016, the Company achieved a $30.0 million enrollment-based milestone, for an aggregate total of $130.0 million , under the Novartis Agreement. The Company uses the relative selling price method to allocate arrangement consideration to the Company’s performance obligations under the Novartis Agreement. Below is a summary of the components of the Company’s collaboration revenue for the three and six months ended June 30, 2017 and 2016 : Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 License revenue $ — $ 22,937 $ — $ 22,937 Research and development activity revenue 1,658 5,150 3,316 6,425 API transfer revenue — 102 — 14,545 Joint operating committee revenue 3 9 7 12 Total collaboration revenue $ 1,661 $ 28,198 $ 3,323 $ 43,919 In the future, the Company may generate additional revenues from a combination of product sales and license fees, milestone payments, research and development activity-related payments, payments for manufactured material and royalties in connection with the Novartis Agreement. The terms of this agreement and other potential collaboration or commercialization agreements the Company may enter into generally contain multiple elements, or deliverables, which may include (i) licenses, or options to obtain licenses, to certain of the Company’s technology and products, (ii) research and development activities to be performed on behalf of the collaborative partner, and (iii) in certain cases, services in connection with the manufacturing of preclinical, clinical and commercial material. Payments to the Company under these arrangements typically include one or more of the following: non-refundable, upfront license fees; option exercise fees; funding of research and/or development efforts; milestone payments; payments for manufactured material; and royalties on future product sales. When evaluating multiple element arrangements, the Company considers whether the deliverables under the arrangement represent separate units of accounting. This evaluation requires subjective determinations and requires management to make judgments about the individual deliverables and whether such deliverables are separable from the other aspects of the contractual relationship. In determining the units of accounting, management evaluates certain criteria, including whether the deliverables have standalone value, based on the relevant facts and circumstances for each arrangement. The consideration received is allocated among the separate units of accounting using the relative selling price method, and the applicable revenue recognition criteria are applied to each of the separate units. The Company determines the estimated selling price for deliverables within each agreement using vendor-specific objective evidence (“VSOE”) of selling price, if available, third-party evidence (“TPE”) of selling price if VSOE is not available, or best estimate of selling price (“BESP”) if neither VSOE nor TPE is available. Determining the best estimate of selling price for a deliverable requires significant judgment. The Company uses BESP to estimate the selling price for licenses to the Company’s proprietary technology, since the Company often does not have VSOE or TPE of selling price for these deliverables. In those circumstances where the Company utilizes BESP to determine the estimated selling price of a license to the Company’s proprietary technology, the Company considers market conditions as well as entity-specific factors, including those factors contemplated in negotiating the agreements as well as internally developed models that include assumptions related to the market opportunity, estimated development costs, probability of success and the time needed to commercialize a product candidate that is subject to the license. In validating the Company’s BESP, the Company evaluates whether changes in the key assumptions used to determine the BESP will have a significant effect on the allocation of arrangement consideration among multiple deliverables. When management believes the license to its intellectual property and products has stand-alone value, the Company generally recognizes revenue attributed to the license upon delivery. When management believes such a license does not have stand-alone value from the other deliverables to be provided in the arrangement, the Company generally recognizes revenue attributed to the license on a straight-line basis over the Company’s contractual or estimated performance period, which is typically the term of the Company’s research and development obligations. If management cannot reasonably estimate when the Company’s performance obligation ends, then revenue is deferred until management can reasonably estimate when the performance obligation ends. The periods over which revenue should be recognized are subject to estimates by management and may change over the course of the research and development agreement. Such a change could have a material impact on the amount of revenue the Company records in future periods. At the inception of arrangements that include milestone payments, the Company evaluates whether each milestone is substantive and at risk to both parties on the basis of the contingent nature of the milestone. This evaluation includes an assessment of whether (a) the consideration is commensurate with either (1) the entity’s performance to achieve the milestone, or (2) the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting from the entity’s performance to achieve the milestone, (b) the consideration relates solely to past performance, and (c) the consideration is reasonable relative to all of the deliverables and payment terms within the arrangement. The Company evaluates factors such as the scientific, regulatory, commercial and other risks that must be overcome to achieve the respective milestone, the level of effort and investment required to achieve the respective milestone and whether the milestone consideration is reasonable relative to all deliverables and payment terms in the arrangement in making this assessment. The Company aggregates its milestones into three categories: (i) clinical and development milestones, (ii) regulatory milestones, and (iii) commercial milestones. Clinical and development milestones are typically achieved when a product candidate advances into a defined phase of clinical research or completes such phase or when a contractually specified clinical trial enrollment target is attained. Regulatory milestones are typically achieved upon acceptance of the submission of an application for marketing approval for a product candidate or upon approval to market the product candidate by the U.S. Food and Drug Administration (the “FDA”) or other regulatory authorities. Commercial milestones are typically achieved when an approved pharmaceutical product reaches certain defined levels of net sales by the licensee, such as when a product first achieves global sales or annual sales of a specified amount. Revenues from clinical and development and regulatory milestone payments, if the milestones are deemed substantive and the milestone payments are nonrefundable, are recognized upon successful accomplishment of the milestones. With regard to the Novartis Agreement, the Company has concluded that the clinical and development milestones and certain regulatory milestones are not substantive and that the marketing approval milestones are substantive. Milestone payments received that are not considered substantive are included in the allocable arrangement consideration and are recognized as revenue in proportion to the relative selling price allocation established at the inception of the arrangement. Revenues from commercial milestone payments are accounted for as royalties and are recorded as revenue upon achievement of the milestone, assuming all other revenue recognition criteria are met. Concentration of Credit Risk The Company’s financial instruments that are exposed to concentration of credit risk consist primarily of cash and cash equivalents and available for sale securities. The Company maintains its cash in bank accounts, which generally exceed federally insured limits. The Company maintains its cash equivalents in investments in money market funds and, at times, in U.S. Treasury securities and investment-grade corporate debt securities with original maturities of 90 days or less. The Company’s available for sale securities are also invested in U.S. Treasury securities and investment-grade corporate debt securities. The Company believes it is not exposed to significant credit risk on its cash, cash equivalents and available for sale securities. Concentration of Suppliers The Company currently relies exclusively upon a single third-party manufacturer to provide supplies of the active pharmaceutical ingredient, or API, for both Zimura and Fovista. The Company also engages a single third-party manufacturer to provide fill/finish services for clinical supplies of both Zimura and Fovista. In addition, the Company currently relies exclusively upon Nektar Therapeutics, or Nektar, to supply it with a proprietary polyethylene glycol, or PEG, reagent for Fovista under a manufacturing and supply agreement. PEG reagent is a chemical the Company uses to modify the chemically synthesized aptamer in Fovista. The PEG reagent made by Nektar is proprietary to Nektar. The Company obtains a different proprietary PEG reagent used to modify the chemically synthesized aptamer in Zimura from a different supplier on a purchase order basis. Furthermore, the Company and its contract manufacturers currently rely upon sole-source suppliers of certain raw materials and other specialized components of production used in the manufacture and fill/finish of each of Zimura and Fovista. If the Company’s third-party manufacturers or fill/finish service providers should become unavailable to the Company for any reason, including as a result of capacity constraints, financial difficulties or insolvency, the Company believes that there are a limited number of potential replacement manufacturers, and the Company likely would incur added costs and delays in identifying or qualifying such replacements. Foreign Currency Translation The Company considers the U.S. dollar to be its functional currency. Expenses denominated in foreign currencies are translated at the exchange rate on the date the expense is incurred. The effect of exchange rate fluctuations on translating foreign currency assets and liabilities into U.S. dollars is included in the Statements of Operations. Foreign exchange transaction gains and losses are included in the results of operations and are not material in the Company’s financial statements. Financial Instruments Cash equivalents and available for sale securities are reflected in the accompanying financial statements at fair value. The carrying amount of accounts payable and accrued expenses, including accrued research and development expenses, approximates fair value due to the short-term nature of those instruments. Property and Equipment Property and equipment, which consists mainly of manufacturing and clinical equipment, furniture and fixtures, computers, software, and other office equipment, and leasehold improvements, are carried at cost less accumulated depreciation. Depreciation is computed over the estimated useful lives of the respective assets, generally three to ten years, using the straight-line method. Amortization of leasehold improvements is recorded over the shorter of the lease term or estimated useful life of the related asset. Research and Development Research and development expenses primarily consist of costs associated with the manufacturing, development and clinical testing of Zimura and Fovista as well as costs associated with the preclinical development of other product candidates and formulations. Research and development expenses consist of: • external research and development expenses incurred under arrangements with third parties, such as contract research organizations (“CROs”) and other vendors and contract manufacturing organizations (“CMOs”) for the production of drug substance and drug product; and • employee-related expenses, including salaries, benefits and share-based compensation expense. Research and development expenses also include costs of acquired product licenses and related technology rights where there is no alternative future use, costs of prototypes used in research and development, consultant fees and amounts paid to collaborative partners. All research and development expenses are charged to operations as incurred in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic, or ASC, 730, Research and Development . The Company accounts for non-refundable advance payments for goods and services that will be used in future research and development activities as expenses when the service has been performed or when the goods have been received, rather than when the payment is made. Income Taxes The Company utilizes the liability method of accounting for deferred income taxes, as set forth in ASC 740, Income Taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. The Company incurred U.S. federal net operating losses (“NOLs”) in each year from its inception in 2007 through 2013 and utilized these NOLs in 2014. Additionally, the Company incurred a U.S. federal net operating loss in 2015 that has been carried back to 2014. Accordingly, all tax years since 2007 are subject to potential tax examination. In the second quarter of 2016, the Internal Revenue Service began an examination of the Company’s 2014 corporate income tax return. This audit was subsequently expanded to include the 2014 and 2015 tax years. Field work on this audit was completed during the second quarter of 2017 resulting in a de minimis preliminary assessment of additional tax. The audit results are currently under review by the IRS Joint Committee. Additionally, the Company received notification from the New York State Department of Taxation and Finance of its intention to perform an audit of the Company's New York State income tax returns for the tax years 2013, 2014 and 2015. Further, the New York City Department of Finance has notified the Company of its intention to audit the Company's New York City General Corporation Tax return for the 2014 tax year. These audits commenced during the second quarter of 2017. Share-Based Compensation The Company follows the provisions of ASC 718, Compensation—Stock Compensation, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and non-employee directors, including employee stock options, restricted stock units (“RSUs”) and the option granted to employees to purchase shares under the 2016 Employee Stock Purchase Plan (the “ESPP”). Share-based compensation expense is based on the grant date fair value estimated in accordance with the provisions of ASC 718 and is generally recognized as an expense over the requisite service period, net of estimated forfeitures. For grants containing performance-based vesting provisions, expense is recognized over the estimated achievement period. Stock Options The Company estimates the fair value of stock options granted to employees and non-employee directors on the date of grant using the Black-Scholes option-pricing model. Due to the lack of trading history, the Company’s computation of stock-price volatility is based on the volatility rates of comparable publicly held companies over a period equal to the expected term of the options granted by the Company. The Company’s computation of expected term is determined using the “simplified” method, which is the midpoint between the vesting date and the end of the contractual term. The Company believes that it does not have sufficient reliable exercise data in order to justify the use of a method other than the “simplified” method of estimating the expected exercise term of employee stock option grants. The Company utilizes a dividend yield of zero based on the fact that the Company has never paid cash dividends to stockholders and has no current intentions to pay cash dividends. The risk-free interest rate is based on the zero-coupon U.S. Treasury yield at the date of grant for a term equivalent to the expected term of the option. For stock options granted as consideration for services rendered by consultants, the Company recognizes expense in accordance with the requirements of ASC 505-50, Equity Based Payments to Non-Employees . Consultant stock option grants are recorded as an expense over the vesting period of the underlying stock options. At the end of each financial reporting period prior to vesting, the value of these options, as calculated using the Black-Scholes option-pricing model, will be re-measured using the fair value of the Company’s common stock and the non-cash expense recognized during the period will be adjusted accordingly. Since the fair value of options granted to consultants is subject to change in the future, the amount of the future expense will include fair value re-measurements until the stock options are fully vested. RSUs The Company estimates the fair value of RSUs granted to employees using the closing market price of the Company’s common stock on the date of grant. ESPP In April 2016, the board of directors adopted the ESPP pursuant to which the Company may sell up to an aggregate of 1,000,000 shares of common stock. The ESPP was approved by the Company’s stockholders in June 2016. The ESPP is considered compensatory and the fair value of the discount and look back provision are estimated using the Black-Scholes option-pricing model and recognized over the six month withholding period prior to purchase. Share-based compensation expense includes expenses related to stock options and RSUs granted to employees, non-employee directors and consultants, as well as the option granted to employees to purchase shares under the ESPP, all of which have been reported in the Company’s Statements of Operations as follows: Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Research and development $ 2,897 $ 6,383 $ 7,047 $ 11,068 General and administrative 2,091 1,926 4,005 5,573 Total $ 4,988 $ 8,309 $ 11,052 $ 16,641 Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2014-9, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-9”). ASU 2014-9 outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. The FASB subsequently issued additional clarifying standards to address issues arising from implementation of the new revenue standard, including a one-year deferral of the effective date for the new revenue standard. Public companies should now apply the guidance in ASU 2014-9 to annual reporting periods beginning after December 15, 2017 and interim periods within those annual periods. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim periods within that annual period. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-9. The Company has not yet completed its final review of the impact of this guidance. The Company anticipates, however, applying the modified retrospective method and initially applying a cumulative effect of the standard as an adjustment to its opening retained earnings balance upon the adoption of ASU 2014-9, effective January 1, 2018. In February 2016, the FASB issued ASU No. 2016-2, Leases (Topic 842) . Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers . The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees will no longer be provided with a source of off-balance sheet financing. Publicly-traded business entities should apply the amendments in ASU 2016-2 for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years (i.e., January 1, 2019, for a calendar year entity). Early application is permitted for all publicly-traded business entities and all nonpublicly-traded business entities upon issuance. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. The Company is currently assessing the impact that adopting this new accounting guidance will have on its financial statements and footnote disclosures. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which clarifies the presentation of certain specific cash flow issues in the Statement of Cash Flows. For public companies, the amendments are effective for annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods and early adoption is permitted. This new guidance is not expected to have a material impact on the Company’s Consolidated Financial Statements. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business , in an effort to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments of this ASU are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. This new guidance will be applicable for the Company’s acquisitions on or after January 1, 2018. |
Net Loss Per Common Share
Net Loss Per Common Share | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Net Loss Per Common Share | 3. Net Loss Per Common Share Basic and diluted net income (loss) per common share is determined by dividing net income (loss) by the weighted average common shares outstanding during the period. For the periods where there is a net loss, stock options and RSUs have been excluded from the calculation of diluted net loss per common share because their effect would be anti-dilutive. Therefore, the weighted average common shares used to calculate both basic and diluted net loss per common share would be the same. The following table sets forth the computation of basic and diluted net income (loss) per common share for the periods indicated: Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Basic and diluted net loss per common share calculation: Net loss $ (22,204 ) $ (29,945 ) $ (65,326 ) $ (66,246 ) Weighted average common shares outstanding - basic and diluted 35,858 35,392 35,831 35,324 Net loss per share of common stock - basic and diluted $ (0.62 ) $ (0.85 ) $ (1.82 ) $ (1.88 ) The following potentially dilutive securities have been excluded from the computations of diluted weighted average common shares outstanding for the periods presented, as they would be anti-dilutive: Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Stock options outstanding 3,805 3,584 3,805 3,584 Restricted stock units 535 661 535 661 Total 4,340 4,245 4,340 4,245 |
Cash, Cash Equivalents and Avai
Cash, Cash Equivalents and Available for Sale Securities | 6 Months Ended |
Jun. 30, 2017 | |
Cash, Cash Equivalents, and Short-term Investments [Abstract] | |
Cash, Cash Equivalents and Available for Sale Securities | 4. Cash, Cash Equivalents and Available for Sale Securities The Company considers all highly liquid investments purchased with original maturities of 90 days or less at the date of purchase to be cash equivalents. Cash and cash equivalents included cash of $4.3 million and $ 25.8 million at June 30, 2017 and December 31, 2016 , respectively. Cash and cash equivalents at June 30, 2017 and December 31, 2016 also included $136.6 million and $108.1 million , respectively, of investments in money market funds, U.S. Treasury securities and certain short-term investment-grade corporate debt securities with original maturities of 90 days or less. The Company considers securities with original maturities of greater than 90 days at the date of purchase to be available for sale securities. The Company held available for sale securities with a fair value totaling $55.5 million and $155.3 million at June 30, 2017 and December 31, 2016 , respectively. These available for sale securities consisted of U.S. Treasury securities and investment-grade corporate debt securities. At June 30, 2017 , the Company held available for sale securities of $55.5 million with maturities of less than one year. The Company did not hold any securities with maturities of greater than one year at June 30, 2017 . The Company evaluates securities with unrealized losses, if any, to determine whether such losses are other than temporary. The Company has determined that there were no other than temporary losses in fair value of its investments as of June 30, 2017 . The Company classifies these securities as available for sale, however, the Company does not currently intend to sell its investments and the Company believes it is more likely than not that the Company will recover the carrying value of these investments. Available for sale securities, including carrying value and estimated fair values, are summarized as follows: As of June 30, 2017 Cost Unrealized Gains Unrealized Losses Fair Value U.S. Treasury securities $ 48,147 $ — $ (13 ) $ 48,134 Corporate debt securities 7,392 — (1 ) 7,391 Total $ 55,539 $ — $ (14 ) $ 55,525 As of December 31, 2016 Cost Unrealized Gains Unrealized Losses Fair Value U.S. Treasury securities $ 120,288 $ 6 $ (33 ) $ 120,261 Corporate debt securities 35,114 — (27 ) 35,087 Total $ 155,402 $ 6 $ (60 ) $ 155,348 The Company’s available for sale securities are reported at fair value on the Company’s Balance Sheets. Unrealized gains (losses) are reported within accumulated other comprehensive income (loss) in the statements of comprehensive income (loss). The cost of securities sold and any realized gains/losses from the sale of available for sale securities are based on the specific identification method. The changes in accumulated other comprehensive income (loss) associated with the unrealized gain (loss) on available for sale securities during the three and six months ended June 30, 2017 and June 30, 2016 were as follows: Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Beginning balance $ (222 ) $ 4 $ (212 ) $ (473 ) Current period changes in fair value before reclassifications, net of tax 36 (122 ) 26 355 Amounts reclassified from accumulated other comprehensive income (loss), net of tax — — — — Total other comprehensive income (loss) 36 (122 ) 26 355 Ending balance $ (186 ) $ (118 ) $ (186 ) $ (118 ) |
Licensing and Commercialization
Licensing and Commercialization Agreement with Novartis Pharma AG | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Licensing and Commercialization Agreement with Novartis Pharma AG | 5. Licensing and Commercialization Agreement with Novartis Pharma AG In May 2014, the Company entered into a licensing and commercialization agreement with Novartis Pharma AG (“Novartis”, and such agreement, the “Novartis Agreement”). Under the Novartis Agreement, the Company granted Novartis exclusive rights under specified patent rights, know-how and trademarks controlled by the Company to manufacture, from bulk API supplied by the Company, standalone Fovista products and products combining Fovista with an anti-VEGF drug to which Novartis has rights in a co-formulated product, for the treatment, prevention, cure or control of any human disease, disorder or condition of the eye, and to develop and commercialize those licensed products in all countries outside of the United States (the “Novartis Territory”). The Company agreed to use commercially reasonable efforts to complete its ongoing pivotal Phase 3 clinical program for Fovista and Novartis agreed to use commercially reasonable efforts to develop a standalone Fovista product and a co-formulated product containing Fovista and an anti-VEGF drug to which Novartis has rights, as well as a pre-filled syringe presentation of such products and to use commercially reasonable efforts, subject to obtaining marketing approval, to commercialize licensed products in the Novartis Territory in accordance with agreed development and marketing plans. Novartis also granted the Company options, subject to specified limitations, and to the extent such rights are controlled by Novartis, to obtain exclusive rights from Novartis to develop and commercialize in the United States the co-formulated and pre-filled syringe products developed by Novartis. The Company and Novartis each granted the other options, subject to specified limitations, to obtain access to study data from certain clinical trials of licensed products that the Company or Novartis may conduct, including for use by the other in regulatory filings in its territory. The Company has agreed to exclusively supply Novartis, and Novartis agreed to exclusively purchase from the Company, its clinical and commercial requirements for the bulk API for Fovista for use in licensed products in the Novartis Territory. The Company agreed not to commercialize any product comprising Fovista or any other anti-PDGF product in the ophthalmic field in the Novartis Territory. The original Novartis Agreement does not specifically address the current status of the Fovista Phase 3 program, wherein the parties are dependent on the OPH1004 data outcome to assess and determine future plans for Fovista. In July 2017, the Company and Novartis entered into a letter agreement to streamline the process and timeline for evaluating data, once it becomes available, from the OPH1004 trial, and, depending on the results from the OPH1004 trial, determining a regulatory strategy in the European Union for Fovista. In the letter agreement, the parties agreed to suspend their affirmative obligations under the Novartis Agreement regarding development, manufacture and commercialization of Fovista products pending receipt of the OPH1004 data and the determination of a regulatory strategy in the European Union. See "Note 13-Subsequent Event" below for a further description of this letter agreement. Novartis paid the Company a $200.0 million upfront fee upon execution of the Novartis Agreement. Novartis also paid the Company $50.0 million upon the achievement of each of two patient enrollment-based milestones, and $30.0 million upon the achievement of a third, and final, enrollment-based milestone, for an aggregate of $130.0 million . Under the terms of the Novartis Agreement, Novartis is also obligated to pay up to an aggregate of an additional $300.0 million upon achievement of specified regulatory milestones, including marketing approval and reimbursement approval in certain countries in the Novartis Territory. In addition, Novartis has agreed to pay the Company up to an aggregate of an additional $400.0 million if Novartis achieves specified sales milestones in the Novartis Territory. Novartis is also obligated to pay the Company royalties with respect to standalone Fovista products and combination Fovista products that Novartis successfully commercializes. The Company will receive royalties at a mid-thirties percentage of net sales of standalone Fovista products and a royalty of approximately equal value for sales of combination Fovista products. Such royalties are subject to customary deductions, credits, and reductions for lack of patent coverage or market exclusivity. Novartis’s obligation to pay such royalties will continue on a licensed product-by-licensed product and country-by-country basis until Novartis’s last actual commercial sale of such licensed product in such country. The Company will continue to be responsible for royalties it owes to third parties on sales of Fovista products. Novartis agreed to pay the Company’s manufacturing costs for clinical supplies and the Company’s manufacturing costs plus a specified percentage margin for commercial supplies of the bulk API for Fovista that the Company supplies to Novartis. If the Company or Novartis exercises each of their respective rights to obtain access to study data from clinical trials conducted by the other party, the party exercising the option will be obligated to pay the other party’s associated past development costs and share with such other party any future associated development costs. If the Company exercises its option to obtain Novartis-controlled rights to develop, manufacture and commercialize any co-formulated Fovista product in the United States, the Company will be obligated to pay a specified percentage of Novartis’s associated past development costs and share with Novartis any future associated development costs. The Company and Novartis will also need to negotiate and agree on financial and other terms that would apply to such rights. If the Company exercises its option to obtain Novartis-controlled rights to develop and commercialize a pre-filled syringe product in the United States, the Company will be obligated to either enter into a supply agreement with Novartis under which the Company will pay Novartis its manufacturing cost plus a specified percentage margin for supplies of Fovista products in pre-filled syringes that Novartis supplies to the Company, or obtain supplies of products in pre-filled syringes from a third-party manufacturer and pay Novartis a low single-digit percentage of the Company’s net sales of such products. The Company retained control over the design and execution of its pivotal Phase 3 clinical program for Fovista and is responsible for funding the costs of that program, subject to Novartis’s responsibility to provide Lucentis, an anti-VEGF drug to which Novartis has rights in the Novartis Territory, for use in the Phase 3 trials already initiated and in other Phase 2 and Phase 3 clinical trials in the Novartis Territory initiated following the effective date of the Novartis Agreement. Novartis has control over, and will be responsible for the costs of, all other clinical trials that may be required to obtain marketing approvals in the Novartis Territory for licensed products under the agreement. Novartis is also responsible for costs associated with co-formulation development, pre-filled syringe development and other development costs in the Novartis Territory, excluding regulatory filing fees in the European Union for the standalone Fovista product, for which the Company will be responsible. The Novartis Agreement, unless earlier terminated by the Company or Novartis, will expire upon the expiration of Novartis’s obligation to pay the Company royalties on net sales of licensed products. The Company and Novartis each may terminate the Novartis Agreement if the other party materially breaches the agreement and does not cure such breach within a specified cure period, if the other party experiences any specified insolvency event, if the other party challenges or assists a third party in challenging the validity or enforceability of certain patent rights controlled by the terminating party, or if the parties are prevented in any manner that materially adversely affects the progression of the development or commercialization of licensed products for a specified period as a result of specified governmental actions. Novartis may terminate the Novartis Agreement at any time without cause, or within a specified period after a change in control of the Company, as defined in the Novartis Agreement, or for specified safety reasons, effective at the end of a specified period following Novartis’s written notice to the Company of Novartis’s election to terminate the agreement. The Company may also terminate the agreement if Novartis determines to seek marketing approval of an alternative anti-PDGF product in the Novartis Territory as more fully described below. Following any termination, all rights to Fovista that the Company granted to Novartis, including, without limitation, the right to commercialize standalone Fovista products in the Novartis Territory, will revert to the Company, Novartis will perform specified activities in connection with transitioning to the Company the rights and responsibilities for the continued development, manufacture and commercialization of the standalone Fovista product for countries in the Novartis Territory, and the parties will cooperate on an orderly wind down of development and commercialization activities for other licensed products in the Novartis Territory. As part of the July 2017 letter agreement, the Company permanently waived its right to terminate the Novartis Agreement in the event that the parties are prevented from materially progressing the development or commercialization of Fovista products for a specified period as a result of specified governmental actions. The Company would have been liable to pay Novartis a substantial termination fee in the event that it had exercised this right to terminate the agreement. See "Note 13-Subsequent Event" below for a further description of the letter agreement. Novartis agreed to specified limitations on its ability to in-license, acquire or commercialize any anti-PDGF product that does not contain Fovista (an “Alternative Anti-PDGF Product”) in the Novartis Territory and, to the extent Novartis develops, in-licenses or acquires such a product, to make such product available to the Company in the United States under specified option conditions. If the Company exercises its option, the Company will be obligated to make certain payments to Novartis, including specified milestone and royalty payments. The amounts of such payments will vary based on the product’s stage of clinical development at the time the Company exercises its option, whether the product is a standalone or combination product and whether Novartis exercises an option to co-promote such product in the United States. If Novartis determines to seek marketing approval of an Alternative Anti-PDGF Product in the Novartis Territory, the Company will, subject to specified limitations, have the option to terminate the Novartis Agreement, convert Novartis’s exclusive licenses into non-exclusive licenses, or elect to receive a royalty on sales of such product by Novartis. If the Company elects to terminate the Novartis Agreement, Novartis will, subject to specified limitations, be required to pay to the Company certain payments based on achievement, with respect to such product, of the milestones that would have otherwise applied to licensed products under the Novartis Agreement. Activities under the Novartis Agreement were evaluated under ASC 605-25, Revenue Recognition—Multiple Element Arrangements (“ASC 605-25”) (as amended by ASU 2009-13, Revenue Recognition (“ASU 2009-13”)) to determine if they represented a multiple element revenue arrangement. The Novartis Agreement includes the following deliverables: (1) an exclusive license to commercialize Fovista outside the United States (the “License Deliverable”); (2) the performance obligation to conduct research and development activities related to the Phase 3 Fovista clinical trials and certain Phase 2 trials for Fovista (the “R&D Activity Deliverable”); (3) the performance obligation to supply API to Novartis for development and manufacturing purposes (the “Manufacturing Deliverable”) and (4) the Company’s obligation to participate on the joint operating committee established under the terms of the Novartis Agreement and related subcommittees (the “Joint Operating Committee Deliverable”). Novartis has the right, subject to certain approval rights of the Company, to sublicense the exclusive royalty-bearing license to commercialize Fovista in the Novartis Territory. The Company’s obligation to provide access to clinical and regulatory information as part of the License Deliverable includes the obligation to provide access to all clinical data, regulatory filings, safety data and manufacturing data to Novartis which is necessary for the commercialization of Fovista in the Novartis Territory. The R&D Activity Deliverable includes the right and responsibility for the Company to conduct the Phase 3 Fovista clinical program and other studies of Fovista in the Novartis Territory which are necessary or desirable for regulatory approval or commercialization of Fovista. The Manufacturing Deliverable includes the obligation for the Company to supply API to Novartis for clinical purposes, for which Novartis has agreed to pay the Company’s manufacturing costs, and for commercial purposes, for which Novartis has agreed to pay the Company’s manufacturing costs plus a specified margin. The Joint Operating Committee Deliverable includes the obligation to participate in the Joint Operating Committee and related subcommittees at least through the first anniversary of regulatory approval in the European Union. All of these deliverables were deemed to have stand-alone value and to meet the criteria to be accounted for as separate units of accounting under ASC 605-25. Factors considered in this determination included, among other things, the subject of the licenses and the research and development and commercial capabilities of Novartis. Accordingly, each unit will be accounted for separately. Options are considered substantive if, at the inception of the arrangement, the Company is at risk as to whether the collaboration partner will choose to exercise the option. Factors that the Company considers in evaluating whether an option is substantive include the overall objective of the arrangement, the benefit the collaborator might obtain from the arrangement without exercising the option, the cost to exercise the option and the likelihood that the option will be exercised. For arrangements under which an option is considered substantive, assuming the option is not priced at a significant and incremental discount, the Company does not consider the item underlying the option to be a deliverable at the inception of the arrangement and the associated option fees are not included in allocable arrangement consideration. Conversely, for arrangements under which an option is not considered substantive or if an option is priced at a significant and incremental discount, the Company would consider the item underlying the option to be a deliverable at the inception of the arrangement and a corresponding amount would be included in allocable arrangement consideration. All of the options included in the Novartis Agreement have been determined to be substantive, and none of the options are priced at a significant and incremental discount. The Novartis Agreement provides that, if the Company elects to terminate the Novartis Agreement because specified governmental actions prevent the parties from materially progressing the development or commercialization of licensed products as described above, the Company will be required to pay a substantial termination fee. The Company has concluded that this termination provision constitutes a contingent event that was unknown at the inception of the agreement. As such, the Company has recorded the $200.0 million upfront payment in deferred revenue, long-term until such time that the contingency related to this termination provision is resolved. In July 2017, the Company permanently waived this termination right. See “Note 13-Subsequent Event” below. The Company believes the enrollment-based milestones and certain regulatory milestones that may be achieved under the Novartis Agreement do not meet the recognition criteria within the definition of a milestone included in ASU 2010-17, Revenue Recognition—Milestone Method , and therefore, payments received for the achievement of the enrollment milestones in excess of the termination fee will be included in the allocable arrangement consideration and allocated to the deliverables based upon BESP using the relative selling price method. The Company believes the marketing approval milestones that may be achieved under the Novartis Agreement are consistent with the definition of a milestone included in ASU 2010-17, Revenue Recognition—Milestone Method , and, accordingly, the Company will recognize payments related to the achievement of such milestones, if any, when the applicable milestone is achieved. Factors considered in this determination included scientific and regulatory risks that must be overcome to achieve each milestone, the level of effort and investment required to achieve each milestone, and the monetary value attributed to each milestone. In May 2014, the Company received an upfront payment of $200.0 million in connection with its entry into the Novartis Agreement, which has not been recorded as revenue due to the Company's right to terminate the agreement and associated obligation to repay the upfront payment under certain circumstances. In each of September 2014 and March 2015, the Company achieved a $50.0 million enrollment-based milestone, and in June 2016, the Company achieved a $30.0 million enrollment-based milestone, for an aggregate total of $130.0 million , under the Novartis Agreement. The Company uses the relative selling price method to allocate arrangement consideration to the Company’s performance obligations under the Novartis Agreement. Below is a summary of the components of the Company’s collaboration revenue for the three and six months ended June 30, 2017 and June 30, 2016 : Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 License revenue $ — $ 22,937 $ — $ 22,937 Research and development activity revenue 1,658 5,150 3,316 6,425 API transfer revenue — 102 — 14,545 Joint operating committee revenue 3 9 7 12 Total collaboration revenue $ 1,661 $ 28,198 $ 3,323 $ 43,919 As of June 30, 2017 , the Company had recorded total deferred revenue of approximately $206.7 million , $200.0 million of which relates to the upfront payment, with the remaining $6.7 million primarily attributable to the Company’s on-going performance obligations under the R&D Activity Deliverable. |
Financing Agreement with Novo A
Financing Agreement with Novo A/S | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
Financing Agreement with Novo A/S | 6. Financing Agreement with Novo A/S In May 2013, the Company entered into a Purchase and Sale Agreement with Novo A/S, which is referred to as the Novo Agreement, pursuant to which the Company had the ability to obtain financing in three tranches in an amount of up to $125.0 million in return for the sale to Novo A/S of aggregate royalties of worldwide sales of (a) Fovista, (b) Fovista-Related Products, and (c) Other Products (each as defined in the Novo Agreement), calculated as mid-single digit percentages of net sales. The Novo Agreement provided for up to three separate purchases for a purchase price of $41.7 million each, at a first, second and third closing, for an aggregate purchase price of $125.0 million . In each purchase, Novo A/S would acquire rights to a low single digit percentage of net sales. In each of May 2013, January 2014 and November 2014, the Company received cash payments of $41.7 million , or $125.0 million in the aggregate, and Novo A/S received, in the aggregate, a right to receive royalties on net sales of Fovista at a mid-single digit percentage. The royalty payment period covered by the Novo Agreement begins on commercial launch and ends, on a product-by-product and country-by-country basis, on the latest to occur of (i) the 12th anniversary of the commercial launch, (ii) the expiration of certain patent rights and (iii) the expiration of the regulatory exclusivity for each product in each country. The Company's obligations under the Novo agreement are secured by a lien on certain of the Company's intellectual property and other rights related to Fovista and other anti-PDGF products the Company may develop. Under the terms of the Novo Agreement, the Company is not required to reimburse or otherwise compensate Novo A/S through any means other than the agreed royalty entitlement. In addition, the Company does not, under the terms of the Novo Agreement, have the right or obligation to prepay Novo A/S in connection with a change of control of the Company or otherwise. The $125.0 million in aggregate proceeds from the three financing tranches under the Novo Agreement represents the full funding available under the Novo Agreement, and has been recorded as a liability on the Company’s Balance Sheet as of June 30, 2017 , in accordance with ASC 730, Research and Development . Because there is a significant related party relationship between the Company and Novo A/S, the Company is treating its obligation to make royalty payments under the Novo Agreement as an implicit obligation to repay the funds advanced by Novo A/S. As the Company makes royalty payments in accordance with the Novo Agreement, it will reduce the liability balance. At the time that such royalty payments become probable and estimable, and if such amounts exceed the liability balance, the Company will impute interest accordingly on a prospective basis based on such estimates. The Novo Agreement requires the establishment of a Joint Oversight Committee in the event that Novo A/S does not continue to have a representative on the Company’s board of directors. The Joint Oversight Committee would have responsibilities that include “discussion and review” of all matters related to Fovista research, development, regulatory approval and commercialization, but there is no provision either implicit or explicit that gives the Joint Oversight Committee or its members decision-making authority. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. Income Taxes The Company utilizes the liability method of accounting for deferred income taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. A valuation allowance is established against deferred tax assets when, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company’s policy is to record interest and penalties on uncertain tax positions as income tax expense. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of taxable income during the periods in which the temporary differences representing net future deductible amounts become deductible, and is impacted by the Company’s ability to carry back losses to 2014, the only year in which the Company had taxable income. The Company is currently projecting tax losses in 2017 . The Company does not expect to realize its net deferred tax assets recorded as of December 31, 2016 in 2017 . The Company expects to carry forward its 2015 and 2016 state tax losses due to various state restrictions on the use of carryback claims. The state NOLs are expected to begin to expire in 2027. Due to the Company’s history of losses and lack of other positive evidence to support taxable income after the 2014 tax year, the Company has recorded a valuation allowance against those remaining deferred tax assets that are not expected to be realized. As of December 31, 2016, the Company has federal NOL carryforwards of approximately $187.4 million . These losses are due to expire in 2036. For the three months and six months ended June 30, 2017 , the Company recognized a de minimis amount of income tax provision (benefit) from income taxes. For the three and six months ended June 30, 2016, the Company recorded a benefit from income taxes of $0.3 million and $0.2 million , respectively. The provision and benefit from income taxes recorded in each period of 2017 and 2016 was based upon the Company’s estimated federal and state income tax liability for those respective years. Pursuant to ASC 740, Income Taxes , the Company routinely evaluates the likelihood of success if challenged on income tax positions claimed on its income tax returns. During the six months ended June 30, 2017, the Company amended certain state income tax returns to claim a refund for taxes previously paid. These claims may result in refunds to the Company of up to approximately $8.4 million . As the Company believes that the likelihood of its position in claiming the refunds does not rise to the level of more likely than not at this time, the Company has not recorded a current tax receivable for the refund claims as of June 30, 2017 . The Company will continue to evaluate its ability to realize its deferred tax assets on a periodic basis and will adjust such amounts in light of changing facts and circumstances including, but not limited to, future projections of taxable income, tax legislation, rulings by relevant tax authorities, the progress of ongoing tax audits and the regulatory approval of products currently under development. Any additional changes to the valuation allowance recorded on deferred tax assets in the future would impact the Company’s income taxes. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 8. Fair Value Measurements ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value standard also establishes a three-level hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company reviews investments on a periodic basis for other than temporary impairments. This review is subjective as it requires management to evaluate whether an event or change in circumstances has occurred in the period that may have a significant adverse effect on the fair value of the investment. The Company uses the market approach to measure fair value for its financial assets. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets. The Company classifies its corporate debt securities within the fair value hierarchy as Level 2 assets, as it primarily utilizes quoted market prices or rates for similar instruments to value these securities. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. The three levels are defined as follows: • Level 1—inputs to the valuation methodology are quoted prices (unadjusted) for an identical asset or liability in an active market. The Company’s Level 1 assets consist of investments in money market funds and U.S. Treasury securities. • Level 2—inputs to the valuation methodology include quoted prices for a similar asset or liability in an active market or model-derived valuations in which all significant inputs are observable for substantially the full term of the asset or liability. The Company’s Level 2 assets consist of investments in investment-grade corporate debt securities. • Level 3—inputs to the valuation methodology are unobservable and significant to the fair value measurement of the asset or liability. The Company does not hold any assets that are measured using Level 3 inputs. The following table presents, for each of the fair value hierarchy levels required under ASC 820, the Company’s assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2017 : Fair Value Measurement Using Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets Investments in money market funds* $ 136,634 $ — $ — Investments in U.S. Treasury securities $ 48,134 $ — $ — Investments in Corporate debt securities $ — $ 7,392 $ — The following table presents, for each of the fair value hierarchy levels required under ASC 820, the Company’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2016 : Fair Value Measurement Using Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets Investments in money market funds* $ 108,096 $ — $ — Investments in U.S. Treasury securities $ 120,261 $ — $ — Investments in Corporate debt securities $ — $ 35,087 $ — * Investments in money market funds, U.S. Treasury securities and corporate debt securities with maturities less than 90 days are reflected in cash and cash equivalents in the accompanying Balance Sheets. No transfer of assets between Level 1 and Level 2 of the fair value hierarchy occurred during the three and six months ended June 30, 2017 . |
Stock Option and Compensation P
Stock Option and Compensation Plans | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Option and Compensation Plans | 9. Stock Option and Compensation Plans The Company adopted its 2007 Stock Incentive Plan (the “2007 Plan”) for employees, non-employee directors and consultants for the purpose of advancing the interests of the Company’s stockholders by enhancing its ability to attract, retain and motivate persons who are expected to make important contributions to the Company. The 2007 Plan provided for the granting of stock option awards, RSUs, and other stock-based and cash-based awards. Following the effectiveness of the 2013 Stock Incentive Plan described below in connection with the closing of the Company’s initial public offering, the Company is no longer granting additional awards under the 2007 Plan. In August 2013, the Company’s board of directors adopted and the Company’s stockholders approved the 2013 stock incentive plan (the “2013 Plan”), which became effective immediately prior to the closing of the Company’s initial public offering. In June 2015, the Company’s board of directors adopted a first amendment to the 2013 Plan. The 2013 Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, RSUs, restricted stock awards and other stock-based awards. Upon the effectiveness of the 2013 Plan, the number of shares of the Company’s common stock that were reserved for issuance under the 2013 Plan was the sum of (1) such number of shares (up to approximately 3,359,641 shares) as is equal to the sum of 739,317 shares (the number of shares of the common stock then available for issuance under the 2007 Plan), and such number of shares of the Company’s common stock that are subject to outstanding awards under the 2007 Plan that expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right plus (2) an annual increase, to be added the first business day of each fiscal year, beginning with the fiscal year ending December 31, 2014 and continuing until, and including, the fiscal year ending December 31, 2023, equal to the lowest of 2,542,372 shares of the Company’s common stock, 4% of the number of shares of the Company’s common stock outstanding on the first day of the fiscal year and an amount determined by its board of directors. The Company’s employees, officers, directors, consultants and advisors are eligible to receive awards under the 2013 Plan. However, incentive stock options may only be granted to employees of the Company. Annual increases under the evergreen provisions of the 2013 Plan have resulted in the addition of an aggregate of approximately 5,454,000 additional shares to the 2013 Plan, including for 2017, an increase of approximately 1,429,000 shares, or 4% of the total number of shares of the Company's common stock outstanding as of January 1, 2017. As of June 30, 2017 , the Company had approximately 1,927,000 shares available for grant under the 2013 Plan. In April 2016, the board of directors adopted the ESPP pursuant to which the Company may sell up to an aggregate of 1,000,000 shares of common stock. The ESPP was approved by the Company’s stockholders in June 2016. The ESPP allows eligible employees to purchase common stock at a price per share equal to 85% of the lower of the fair market value of the common stock at the beginning or end of each six month offering period during the term of the ESPP. The first offering period began in September 2016. A summary of the stock option activity, weighted average exercise prices, options outstanding and exercisable as of June 30, 2017 is as follows: Common Stock Options Weighted Average Exercise Price Outstanding, December 31, 2016 3,359 $ 39.92 Granted 1,231 $ 4.33 Exercised (20 ) $ 1.64 Expired or forfeited (765 ) $ 41.96 Outstanding, June 30, 2017 3,805 $ 28.18 Options exercisable at June 30, 2017 1,831 Weighted average grant date fair value (per share) of options granted during the period $ 3.00 As of June 30, 2017 , there were approximately 3,537,000 options outstanding, net of estimated forfeitures, that had vested or are expected to vest. The weighted average exercise price of these options was $28.73 per option; the weighted average remaining contractual life of these options was 7.7 years ; and the aggregate intrinsic value of these options was approximately $0.1 million . A summary of the stock options outstanding and exercisable as of June 30, 2017 is as follows: As of June 30, 2017 Options Outstanding Options Exercisable Range of Exercise Prices Total Options Outstanding Weighted Average Remaining Life (Years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $0.12-$10.03 1,346 9.0 $ 4.72 181 $ 7.25 $10.04-$20.00 255 6.0 $ 13.46 196 $ 13.51 $20.01-$30.00 127 6.4 $ 25.13 112 $ 25.12 $30.01-$40.00 910 6.1 $ 32.70 779 $ 32.84 $40.01-$55.00 754 8.0 $ 46.43 390 $ 45.83 $55.01-$73.22 413 8.5 $ 71.41 173 $ 70.78 3,805 7.8 $ 28.18 1,831 $ 34.12 Aggregate Intrinsic Value $ 83 $ 78 Cash proceeds from, and the aggregate intrinsic value of, stock options exercised during the three and six months ended June 30, 2017 and 2016 , respectively, were as follows: Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Cash proceeds from options exercised $ 15 $ 3,039 $ 46 $ 3,808 Aggregate intrinsic value of options exercised $ 6 $ 5,206 $ 43 $ 7,421 In connection with stock option awards granted to employees, the Company recognized approximately $3.6 million and $5.5 million in share-based compensation expense during the three months ended June 30, 2017 and 2016 , respectively, net of expected forfeitures. In connection with stock option awards granted to employees, the Company recognized approximately $8.0 million and $11.6 million in share-based compensation expense during the six months ended June 30, 2017 and 2016 , respectively, net of expected forfeitures. As of June 30, 2017 , there were approximately $19.6 million of unrecognized compensation costs, net of estimated forfeitures, related to stock option awards granted to employees, which are expected to be recognized over a remaining weighted average period of 2.3 years . In connection with stock option awards granted to consultants, the Company recognized approximately $0.1 million and $0.5 million in share-based compensation expense during the three months ended June 30, 2017 and 2016 , respectively, net of expected forfeitures. In connection with stock option awards granted to consultants, the Company recognized approximately $0.2 million and $0.9 million in share-based compensation expense during the six months ended June 30, 2017 and 2016 , respectively, net of expected forfeitures. As of June 30, 2017 , there were approximately $0.3 million of unrecognized compensation costs, net of estimated forfeitures, related to stock option awards granted to consultants, which are expected to be recognized over a remaining weighted average period of 2.1 years . The following table presents a summary of the Company’s outstanding RSU awards granted as of June 30, 2017 : Restricted Stock Units Weighted Average Grant-Date Fair Value Outstanding, December 31, 2016 721 $ 55.33 Awarded 248 $ 4.42 Vested (174 ) $ 31.75 Forfeited (260 ) $ 50.32 Outstanding, June 30, 2017 535 $ 38.03 As of June 30, 2017 , there were approximately 365,000 RSUs outstanding, net of estimated forfeitures, that are expected to vest. The weighted average fair value of these RSUs was $31.83 per share; and the aggregate intrinsic value of these RSUs was approximately $0.9 million . In connection with RSUs granted to employees, the Company recognized approximately $1.3 million and $2.3 million in share-based compensation expense during the three months ended June 30, 2017 and 2016 , respectively, net of expected forfeitures. In connection with RSUs granted to employees, the Company recognized approximately $2.6 million and $4.1 million in share-based compensation expense during the six months ended June 30, 2017 and 2016 , respectively, net of expected forfeitures. As of June 30, 2017 , there were approximately $8.9 million of unrecognized compensation costs, net of estimated forfeitures, related to RSUs granted to employees, which are expected to be recognized over a remaining weighted average period of 2.4 years . In connection with RSUs granted to consultants, the Company recognized a de minimis amount of share-based compensation expense during the three months ended June 30, 2017 , net of expected forfeitures. In connection with RSUs granted to consultants, the Company recognized $0.1 million of share-based compensation expense during the six months ended June 30, 2017 , net of expected forfeitures. There were no RSUs granted to consultants during the three and six months ended June 30, 2016. As of June 30, 2017 , there were approximately $0.1 million of unrecognized compensation costs, net of estimated forfeitures, related to RSUs granted to consultants, which are expected to be recognized over a remaining weighted average period of 2.2 years . In connection with the ESPP made available to employees, the Company recognized a de minimis amount of share-based compensation expense during the three months ended June 30, 2017 . In connection with the ESPP made available to employees, the Company recognized $0.1 million of share-based compensation expense during the six months ended June 30, 2017 . The Company did not recognize any share-based compensation expense during the three and six months ended June 30, 2016. As of June 30, 2017 , there was a de minimis amount of unrecognized compensation costs, net of estimated forfeitures, related to the ESPP, which are expected to be recognized over 0.3 years . Additionally, there were 4,746 shares of common stock issued under the ESPP during the six months ended June 30, 2017 . There were no shares of common stock issued under the ESPP plan during the six months ended June 30, 2016. As of June 30, 2017 , 995,254 shares were available for future purchases under the ESPP. |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 10. Property and Equipment Property and equipment as of June 30, 2017 and December 31, 2016 were as follows: Useful Life (Years) June 30, December 31, 2016 Manufacturing and clinical equipment 7 - 10 $ 412 $ 617 Computer, software and other office equipment 5 1,711 1,711 Furniture and fixtures 1 - 7 774 774 Leasehold improvements 1 - 5 1,835 1,835 4,732 4,937 Accumulated depreciation (2,844 ) (1,656 ) Property and equipment, net $ 1,888 $ 3,281 For the three and six months ended June 30, 2017 , depreciation expense was $0.6 million and $1.4 million , respectively. For the three and six months ended June 30, 2016, depreciation expense was $0.2 million and $0.4 million , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 11. Commitments and Contingencies Under various agreements, the Company may be required to pay royalties and make milestone payments. These agreements include the following: • Under the Company’s divestiture agreement with OSI (Eyetech), Inc., which agreement is now held by OSI Pharmaceuticals, LLC., or OSI Pharmaceuticals, a subsidiary of Astellas US, LLC, for rights to particular anti-PDGF aptamers, including Fovista, the Company is obligated to pay to OSI Pharmaceuticals future one-time payments of $12.0 million in the aggregate upon marketing approval in the United States and the European Union of a covered anti-PDGF product. The Company is also obligated to pay to OSI Pharmaceuticals a royalty at a low single-digit percentage of net sales of any covered anti-PDGF product the Company successfully commercializes. • Under a license agreement with Archemix Corp., or Archemix, with respect to pharmaceutical products comprised of or derived from any anti-PDGF aptamer, the Company is obligated to make future payments to Archemix of up to an aggregate of $14.0 million if the Company achieves specified clinical and regulatory milestones with respect to Fovista, up to an aggregate of $3.0 million if the Company achieves specified commercial milestones with respect to Fovista and, for each other anti-PDGF aptamer product that it may develop under the agreement, up to an aggregate of approximately $18.8 million if the Company achieves specified clinical and regulatory milestones and up to an aggregate of $3.0 million if the Company achieves specified commercial milestones. No royalties are payable to Archemix under this license agreement. • Under a license agreement with Archemix with respect to pharmaceutical products comprised of or derived from anti-C5 aptamers, for each anti-C5 aptamer product that the Company may develop under the agreement, including Zimura, the Company is obligated to make future payments to Archemix of up to an aggregate of $57.5 million if the Company achieves specified development, clinical and regulatory milestones and up to an aggregate of $22.5 million if the Company achieves specified commercial milestones. The Company is also obligated to pay Archemix a double-digit percentage of specified non-royalty payments the Company may receive from any sublicensee of the Company’s rights under this license agreement. No royalties are payable to Archemix under this license agreement. • Under a license, manufacturing and supply agreement with Nektar for specified pegylation reagents used to manufacture Fovista, the Company is obligated to make future payments to Nektar of up to an aggregate of $6.5 million if the Company achieves specified clinical and regulatory milestones, and an additional payment of $3.0 million if the Company achieves a specified commercial milestone with respect to Fovista. The Company is obligated to pay Nektar tiered royalties at low to mid-single-digit percentages of net sales of any licensed product the Company successfully commercializes, with the royalty percentage determined by the Company’s level of licensed product sales, the extent of patent coverage for the licensed product and whether the Company has granted a third-party commercialization rights to the licensed product. In June 2014, the Company paid Nektar $19.8 million in connection with its entry into the Novartis Agreement. • Under the Novo Agreement, with respect to Fovista, the Company will be obligated to pay Novo A/S a mid-single-digit percentage royalty based on worldwide sales of Fovista. See "Note 6—Financing Agreement with Novo A/S" above for further information about Novo Agreement. The Company also has letter agreements with certain employees that require the funding of a specific level of payments, if certain events, such as a termination of employment in connection with a change in control or termination of employment by the employee for good reason or by the Company without cause, occur. In addition, in the course of normal business operations, the Company has agreements with contract service providers to assist in the performance of the Company’s research and development and manufacturing activities. Expenditures to CROs and CMOs represent significant costs in clinical development. Subject to required notice periods and the Company’s obligations under binding purchase orders, the Company can elect to discontinue the work under these agreements at any time. Legal Proceedings On January 11, 2017, a putative class action lawsuit was filed against the Company and certain of its current and former executive officers in the United States District Court for the Southern District of New York, captioned Frank Micholle v. Ophthotech Corporation, et al., No. 1:17-cv-00210. The complaint purports to be brought on behalf of shareholders who purchased the Company's common stock between May 11, 2015 and December 12, 2016. The complaint generally alleges that the Company and certain of its officers violated Sections 10(b) and/or 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by making allegedly false and/or misleading statements concerning the prospects of the Company's Phase 3 trials for Fovista in combination with anti-VEGF drugs for the treatment of wet AMD. The complaint seeks equitable and/or injunctive relief, unspecified damages, attorneys’ fees, and other costs. On March 9, 2017, a second putative class action lawsuit was filed against the Company and the same group of its current and former executive officers in the United States District Court for the Southern District of New York, captioned Wasson v. Ophthotech Corporation, et al., No. 1:17-cv-01758. The complaint purports to be brought on behalf of shareholders who purchased the Company’s common stock between May 11, 2015 and December 9, 2016. The allegations made in the complaint are similar to those made in the Micholle complaint. Putative lead plaintiffs in the Micholle action have moved to consolidate the Micholle and Wasson actions. On May 30, 2017, a shareholder derivative action was filed against the members of the Company’s Board of Directors in the United States District Court for the Southern District of New York, captioned Etelmendorf v. Bolte, et al., No. 1:17-cv-04042. The complaint alleges that defendants breached their fiduciary duties to the Company by causing or permitting the Company to make allegedly false and/or misleading statements concerning the prospects of the Company’s Phase 3 trials for Fovista in combination with anti-VEGF drugs for the treatment of wet AMD, and by approving certain executive compensation. The complaint also alleges that defendants were unjustly enriched as a result of the alleged conduct. The complaint purports to seek unspecified damages on behalf of the Company, as well as an order directing the Company to reform and comply with its governance obligations, attorneys’ fees, and other costs. The Company denies any allegations of wrongdoing and intends to vigorously defend against these lawsuits. The Company is unable, however, to predict the outcome of these matters at this time. Moreover, any conclusion of this matter in a manner adverse to the Company and for which it incurs substantial costs or damages not covered by the Company's directors’ and officers’ liability insurance would have a material adverse effect on its financial condition and business. In addition, the litigation could adversely impact the Company's reputation and divert management’s attention and resources from other priorities, including the execution of business plans and strategies that are important to the Company's ability to grow its business, any of which could have a material adverse effect on the Company's business. |
Restructuring Activities
Restructuring Activities | 6 Months Ended |
Jun. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Activities | 12. Restructuring Activities In December 2016, the Company announced its intention to implement a reduction in personnel to focus on an updated business plan. In January 2017, the Board of Directors approved a plan to implement a reduction in personnel involving approximately 80% of the Company’s workforce based on the number of employees at the time the plan was approved. During the first six months of 2017, the Company's workforce has been reduced by 98 employees in connection with the reduction in personnel and through natural attrition, and the Company expects the reduction of the additional 20 affected employees will be substantially completed during the third quarter of 2017. In connection with such reduction in personnel, the Company estimates that it will incur approximately $13.4 million of pre-tax charges through the third quarter of 2017, of which approximately $12.5 million in the aggregate is expected to result in cash expenditures. These pre-tax charges relate to (a) expected severance, stock compensation and other employee costs of approximately $11.3 million and (b) expected lease termination costs of approximately $2.1 million . As of June 30, 2017 , the Company's cash expenditures related to such reduction in personnel totaled $8.0 million . In connection with the reduction in personnel, the Company recognized approximately $1.8 million and $10.5 million of severance, stock compensation and other employee costs for the three and six months ended June 30, 2017 , of which $1.1 million and $5.9 million were recorded in "Research and development" expense and $0.7 million and $4.6 million were recorded in "General and administrative" expense in the Company's Statements of Operations. As of June 30, 2017 , the Company's accrual balance for severance and benefit costs was $2.0 million which was recorded in "Accounts payable and accrued expenses" in the Company's Balance Sheet. The severance and other employee cost accruals as of June 30, 2017 are expected to be paid through to the first half of 2018. The following is a reconciliation of the severance-related accrual activity for the six months ended June 30, 2017: Accrued Severance and Other Employee Costs Beginning Balance $ — Accrued restructuring expenses 10,006 Payments (8,039 ) Ending Balance $ 1,967 On January 26, 2017, the Company issued a notice of termination under the Lease Agreement, dated as of September 30, 2007, between the Company and One Penn Plaza LLC, as previously supplemented and amended (as so supplemented and amended, the “Lease”) for office space at One Penn Plaza in New York, New York. The termination of the Lease triggered an early termination payment by the Company of approximately $0.9 million and will be effective in January 2018, through which time the Company will be responsible for paying continuing rental fees, as well as taxes, operating expenses and utility and other charges related to the leased premises. On January 26, 2017, the Company issued a notice of termination under the Sublease Agreement between the Company and Otsuka America Pharmaceutical, Inc. (the “Sublease”) for office space at One University Square, Princeton, New Jersey. The termination of the Sublease triggered an early termination payment by the Company of approximately $1.2 million and will be effective in February 2018, through which time the Company will be responsible for paying continuing rental fees, as well as taxes, operating expenses and utility and other charges related to the subleased premises. On January 26, 2017, the Company issued a notice of termination under its Office Lease Agreement between the Company and PSN Partners, L.P. (the “Office Lease”) for office space in Palmer Square in Princeton, New Jersey. The termination of the Office Lease did not trigger any early termination payment and will be effective in October 2017, through which time the Company will be responsible for paying continuing rental fees. During January 2017, the Company made the early termination payments as described above and recognized $2.1 million of additional facilities costs which were recorded in "General and administrative" expense in the Company's Statements of Operations. |
Subsequent Event
Subsequent Event | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | 13. Subsequent Event On July 3, 2017, the Company and Novartis entered into a letter agreement with respect to the Novartis Agreement. See “Note 5 - Licensing and Commercialization Agreement” for further information about the Novartis Agreement. Pursuant to the letter agreement, the Company and Novartis have agreed to a process and timeline for evaluating data, once it becomes available, from the Company’s Phase 3 OPH1004 trial, and, depending on the results from the OPH1004 trial, determining a regulatory strategy in the European Union and continuing efforts under the Novartis Agreement to develop and commercialize Fovista. Pursuant to the letter agreement, the Company and Novartis have agreed to suspend their affirmative obligations under the Novartis Agreement regarding development, manufacture and commercialization of Fovista products pending receipt of the OPH1004 data and the determination of a regulatory strategy in the European Union. The letter agreement also provides Novartis with a shorter notice period in the event Novartis determines to terminate the Novartis Agreement in certain circumstances and provides for a process for the parties to determine the scope and funding for additional clinical trials, if any, required for regulatory approval of Fovista. If the Company and Novartis do not otherwise agree as to the funding for any additional clinical trials, each party will be required to fund fifty percent ( 50% ) of the cost and expense of such clinical trials. Under the letter agreement, the Company permanently waived its right to terminate the Novartis Agreement under Section 11.06 thereof in the event that the parties are prevented from materially progressing the development or commercialization of Fovista products for a specified period as a result of specified governmental actions. The Company would have been liable to pay Novartis a substantial termination fee in the event that it had exercised its rights under Section 11.06. In addition, the letter agreement provides Novartis with a fully paid-up, royalty-free license to use data from the Lucentis monotherapy arms of the Company’s Phase 2b OPH1001 trial and Phase 3 OPH1002 and OPH1003 trials in the Novartis Territory in connection with the development, manufacturing and commercialization of Novartis-controlled anti-VEGF products. The Lucentis study data license will continue until the fifth anniversary of the letter agreement or the date the Novartis Agreement expires or terminates, whichever is later. The Company is currently estimating the deferred revenue to be recognized as a result of this letter agreement and expects to recognize a majority of the revenue during the third quarter of 2017. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited financial information as of June 30, 2017 and for the three and six months ended June 30, 2017 and 2016 has been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. The December 31, 2016 Balance Sheet was derived from the Company’s audited financial statements. These interim financial statements should be read in conjunction with the notes to the financial statements contained in the Company’s Annual Report on Form 10-K (“Annual Report”) for 2016 , as filed with the SEC on February 28, 2017. In the opinion of management, the unaudited financial information as of June 30, 2017 and for the three and six months ended June 30, 2017 and 2016 , reflects all adjustments, which are normal recurring adjustments, necessary to present a fair statement of the financial position, results of operations and cash flows of the Company. The results of operations for the three and six months ended June 30, 2017 and 2016 are not necessarily indicative of the operating results for the full fiscal year or any future period. |
Segment and Geographic Information | Segment and geographic information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating and reporting segment. |
Use of Estimates | Use of Estimates The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and judgments that affect the amounts reported in the financial statements and accompanying notes. The Company bases its estimates and judgments on historical experience and on various other assumptions that it believes are reasonable under the circumstances. The amounts of assets and liabilities reported in the Company’s Balance Sheets and the amount of expenses reported for each of the periods presented are affected by estimates and assumptions, which are used for, but not limited to, accounting for research and development costs, revenue recognition, accounting for share-based compensation and accounting for income taxes. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of 90 days or less when purchased to be cash equivalents. The carrying amounts reported in the Balance Sheets for cash and cash equivalents are valued at cost, which approximates their fair value. |
Available for Sale Securities | Available for Sale Securities The Company considers securities with original maturities of greater than 90 days when purchased to be available for sale securities. Available for sale securities with original maturities of greater than one year are recorded as non-current assets. Available for sale securities are recorded at fair value and unrealized gains and losses are recorded within accumulated other comprehensive income (loss). The estimated fair value of the available for sale securities is determined based on quoted market prices or rates for similar instruments. In addition, the cost of debt securities in this category is adjusted for amortization of premium and accretion of discount to maturity. The Company evaluates securities with unrealized losses to determine whether such losses, if any, are other than temporary. |
Revenue Recognition | Revenue Recognition Collaboration Revenue Prior to 2014, the Company had not generated any revenue. In May 2014, the Company received an upfront payment of $200.0 million in connection with its licensing and commercialization agreement with Novartis Pharma AG, (the “Novartis Agreement”), which has not been recorded as revenue due to the Company's right to terminate the agreement and associated obligation to repay the upfront payment under certain circumstances. In each of September 2014 and March 2015, the Company achieved a $50.0 million enrollment-based milestone, and in June 2016, the Company achieved a $30.0 million enrollment-based milestone, for an aggregate total of $130.0 million , under the Novartis Agreement. The Company uses the relative selling price method to allocate arrangement consideration to the Company’s performance obligations under the Novartis Agreement. Below is a summary of the components of the Company’s collaboration revenue for the three and six months ended June 30, 2017 and 2016 : Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 License revenue $ — $ 22,937 $ — $ 22,937 Research and development activity revenue 1,658 5,150 3,316 6,425 API transfer revenue — 102 — 14,545 Joint operating committee revenue 3 9 7 12 Total collaboration revenue $ 1,661 $ 28,198 $ 3,323 $ 43,919 In the future, the Company may generate additional revenues from a combination of product sales and license fees, milestone payments, research and development activity-related payments, payments for manufactured material and royalties in connection with the Novartis Agreement. The terms of this agreement and other potential collaboration or commercialization agreements the Company may enter into generally contain multiple elements, or deliverables, which may include (i) licenses, or options to obtain licenses, to certain of the Company’s technology and products, (ii) research and development activities to be performed on behalf of the collaborative partner, and (iii) in certain cases, services in connection with the manufacturing of preclinical, clinical and commercial material. Payments to the Company under these arrangements typically include one or more of the following: non-refundable, upfront license fees; option exercise fees; funding of research and/or development efforts; milestone payments; payments for manufactured material; and royalties on future product sales. When evaluating multiple element arrangements, the Company considers whether the deliverables under the arrangement represent separate units of accounting. This evaluation requires subjective determinations and requires management to make judgments about the individual deliverables and whether such deliverables are separable from the other aspects of the contractual relationship. In determining the units of accounting, management evaluates certain criteria, including whether the deliverables have standalone value, based on the relevant facts and circumstances for each arrangement. The consideration received is allocated among the separate units of accounting using the relative selling price method, and the applicable revenue recognition criteria are applied to each of the separate units. The Company determines the estimated selling price for deliverables within each agreement using vendor-specific objective evidence (“VSOE”) of selling price, if available, third-party evidence (“TPE”) of selling price if VSOE is not available, or best estimate of selling price (“BESP”) if neither VSOE nor TPE is available. Determining the best estimate of selling price for a deliverable requires significant judgment. The Company uses BESP to estimate the selling price for licenses to the Company’s proprietary technology, since the Company often does not have VSOE or TPE of selling price for these deliverables. In those circumstances where the Company utilizes BESP to determine the estimated selling price of a license to the Company’s proprietary technology, the Company considers market conditions as well as entity-specific factors, including those factors contemplated in negotiating the agreements as well as internally developed models that include assumptions related to the market opportunity, estimated development costs, probability of success and the time needed to commercialize a product candidate that is subject to the license. In validating the Company’s BESP, the Company evaluates whether changes in the key assumptions used to determine the BESP will have a significant effect on the allocation of arrangement consideration among multiple deliverables. When management believes the license to its intellectual property and products has stand-alone value, the Company generally recognizes revenue attributed to the license upon delivery. When management believes such a license does not have stand-alone value from the other deliverables to be provided in the arrangement, the Company generally recognizes revenue attributed to the license on a straight-line basis over the Company’s contractual or estimated performance period, which is typically the term of the Company’s research and development obligations. If management cannot reasonably estimate when the Company’s performance obligation ends, then revenue is deferred until management can reasonably estimate when the performance obligation ends. The periods over which revenue should be recognized are subject to estimates by management and may change over the course of the research and development agreement. Such a change could have a material impact on the amount of revenue the Company records in future periods. At the inception of arrangements that include milestone payments, the Company evaluates whether each milestone is substantive and at risk to both parties on the basis of the contingent nature of the milestone. This evaluation includes an assessment of whether (a) the consideration is commensurate with either (1) the entity’s performance to achieve the milestone, or (2) the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting from the entity’s performance to achieve the milestone, (b) the consideration relates solely to past performance, and (c) the consideration is reasonable relative to all of the deliverables and payment terms within the arrangement. The Company evaluates factors such as the scientific, regulatory, commercial and other risks that must be overcome to achieve the respective milestone, the level of effort and investment required to achieve the respective milestone and whether the milestone consideration is reasonable relative to all deliverables and payment terms in the arrangement in making this assessment. The Company aggregates its milestones into three categories: (i) clinical and development milestones, (ii) regulatory milestones, and (iii) commercial milestones. Clinical and development milestones are typically achieved when a product candidate advances into a defined phase of clinical research or completes such phase or when a contractually specified clinical trial enrollment target is attained. Regulatory milestones are typically achieved upon acceptance of the submission of an application for marketing approval for a product candidate or upon approval to market the product candidate by the U.S. Food and Drug Administration (the “FDA”) or other regulatory authorities. Commercial milestones are typically achieved when an approved pharmaceutical product reaches certain defined levels of net sales by the licensee, such as when a product first achieves global sales or annual sales of a specified amount. Revenues from clinical and development and regulatory milestone payments, if the milestones are deemed substantive and the milestone payments are nonrefundable, are recognized upon successful accomplishment of the milestones. With regard to the Novartis Agreement, the Company has concluded that the clinical and development milestones and certain regulatory milestones are not substantive and that the marketing approval milestones are substantive. Milestone payments received that are not considered substantive are included in the allocable arrangement consideration and are recognized as revenue in proportion to the relative selling price allocation established at the inception of the arrangement. Revenues from commercial milestone payments are accounted for as royalties and are recorded as revenue upon achievement of the milestone, assuming all other revenue recognition criteria are met. |
Concentration of Credit Risk | Concentration of Credit Risk The Company’s financial instruments that are exposed to concentration of credit risk consist primarily of cash and cash equivalents and available for sale securities. The Company maintains its cash in bank accounts, which generally exceed federally insured limits. The Company maintains its cash equivalents in investments in money market funds and, at times, in U.S. Treasury securities and investment-grade corporate debt securities with original maturities of 90 days or less. The Company’s available for sale securities are also invested in U.S. Treasury securities and investment-grade corporate debt securities. The Company believes it is not exposed to significant credit risk on its cash, cash equivalents and available for sale securities. |
Concentration of Suppliers | Concentration of Suppliers The Company currently relies exclusively upon a single third-party manufacturer to provide supplies of the active pharmaceutical ingredient, or API, for both Zimura and Fovista. The Company also engages a single third-party manufacturer to provide fill/finish services for clinical supplies of both Zimura and Fovista. In addition, the Company currently relies exclusively upon Nektar Therapeutics, or Nektar, to supply it with a proprietary polyethylene glycol, or PEG, reagent for Fovista under a manufacturing and supply agreement. PEG reagent is a chemical the Company uses to modify the chemically synthesized aptamer in Fovista. The PEG reagent made by Nektar is proprietary to Nektar. The Company obtains a different proprietary PEG reagent used to modify the chemically synthesized aptamer in Zimura from a different supplier on a purchase order basis. Furthermore, the Company and its contract manufacturers currently rely upon sole-source suppliers of certain raw materials and other specialized components of production used in the manufacture and fill/finish of each of Zimura and Fovista. If the Company’s third-party manufacturers or fill/finish service providers should become unavailable to the Company for any reason, including as a result of capacity constraints, financial difficulties or insolvency, the Company believes that there are a limited number of potential replacement manufacturers, and the Company likely would incur added costs and delays in identifying or qualifying such replacements. |
Foreign Currency Translation | Foreign Currency Translation The Company considers the U.S. dollar to be its functional currency. Expenses denominated in foreign currencies are translated at the exchange rate on the date the expense is incurred. The effect of exchange rate fluctuations on translating foreign currency assets and liabilities into U.S. dollars is included in the Statements of Operations. Foreign exchange transaction gains and losses are included in the results of operations and are not material in the Company’s financial statements. |
Financial Instruments | Financial Instruments Cash equivalents and available for sale securities are reflected in the accompanying financial statements at fair value. The carrying amount of accounts payable and accrued expenses, including accrued research and development expenses, approximates fair value due to the short-term nature of those instruments. |
Property and Equipment | Property and Equipment Property and equipment, which consists mainly of manufacturing and clinical equipment, furniture and fixtures, computers, software, and other office equipment, and leasehold improvements, are carried at cost less accumulated depreciation. Depreciation is computed over the estimated useful lives of the respective assets, generally three to ten years, using the straight-line method. Amortization of leasehold improvements is recorded over the shorter of the lease term or estimated useful life of the related asset. |
Research and Development | Research and Development Research and development expenses primarily consist of costs associated with the manufacturing, development and clinical testing of Zimura and Fovista as well as costs associated with the preclinical development of other product candidates and formulations. Research and development expenses consist of: • external research and development expenses incurred under arrangements with third parties, such as contract research organizations (“CROs”) and other vendors and contract manufacturing organizations (“CMOs”) for the production of drug substance and drug product; and • employee-related expenses, including salaries, benefits and share-based compensation expense. Research and development expenses also include costs of acquired product licenses and related technology rights where there is no alternative future use, costs of prototypes used in research and development, consultant fees and amounts paid to collaborative partners. All research and development expenses are charged to operations as incurred in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic, or ASC, 730, Research and Development . The Company accounts for non-refundable advance payments for goods and services that will be used in future research and development activities as expenses when the service has been performed or when the goods have been received, rather than when the payment is made. |
Income Taxes | Income Taxes The Company utilizes the liability method of accounting for deferred income taxes, as set forth in ASC 740, Income Taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. The Company incurred U.S. federal net operating losses (“NOLs”) in each year from its inception in 2007 through 2013 and utilized these NOLs in 2014. Additionally, the Company incurred a U.S. federal net operating loss in 2015 that has been carried back to 2014. Accordingly, all tax years since 2007 are subject to potential tax examination. In the second quarter of 2016, the Internal Revenue Service began an examination of the Company’s 2014 corporate income tax return. This audit was subsequently expanded to include the 2014 and 2015 tax years. Field work on this audit was completed during the second quarter of 2017 resulting in a de minimis preliminary assessment of additional tax. The audit results are currently under review by the IRS Joint Committee. Additionally, the Company received notification from the New York State Department of Taxation and Finance of its intention to perform an audit of the Company's New York State income tax returns for the tax years 2013, 2014 and 2015. Further, the New York City Department of Finance has notified the Company of its intention to audit the Company's New York City General Corporation Tax return for the 2014 tax year. These audits commenced during the second quarter of 2017. |
Share-Based Compensation | Share-Based Compensation The Company follows the provisions of ASC 718, Compensation—Stock Compensation, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and non-employee directors, including employee stock options, restricted stock units (“RSUs”) and the option granted to employees to purchase shares under the 2016 Employee Stock Purchase Plan (the “ESPP”). Share-based compensation expense is based on the grant date fair value estimated in accordance with the provisions of ASC 718 and is generally recognized as an expense over the requisite service period, net of estimated forfeitures. For grants containing performance-based vesting provisions, expense is recognized over the estimated achievement period. Stock Options The Company estimates the fair value of stock options granted to employees and non-employee directors on the date of grant using the Black-Scholes option-pricing model. Due to the lack of trading history, the Company’s computation of stock-price volatility is based on the volatility rates of comparable publicly held companies over a period equal to the expected term of the options granted by the Company. The Company’s computation of expected term is determined using the “simplified” method, which is the midpoint between the vesting date and the end of the contractual term. The Company believes that it does not have sufficient reliable exercise data in order to justify the use of a method other than the “simplified” method of estimating the expected exercise term of employee stock option grants. The Company utilizes a dividend yield of zero based on the fact that the Company has never paid cash dividends to stockholders and has no current intentions to pay cash dividends. The risk-free interest rate is based on the zero-coupon U.S. Treasury yield at the date of grant for a term equivalent to the expected term of the option. For stock options granted as consideration for services rendered by consultants, the Company recognizes expense in accordance with the requirements of ASC 505-50, Equity Based Payments to Non-Employees . Consultant stock option grants are recorded as an expense over the vesting period of the underlying stock options. At the end of each financial reporting period prior to vesting, the value of these options, as calculated using the Black-Scholes option-pricing model, will be re-measured using the fair value of the Company’s common stock and the non-cash expense recognized during the period will be adjusted accordingly. Since the fair value of options granted to consultants is subject to change in the future, the amount of the future expense will include fair value re-measurements until the stock options are fully vested. RSUs The Company estimates the fair value of RSUs granted to employees using the closing market price of the Company’s common stock on the date of grant. ESPP In April 2016, the board of directors adopted the ESPP pursuant to which the Company may sell up to an aggregate of 1,000,000 shares of common stock. The ESPP was approved by the Company’s stockholders in June 2016. The ESPP is considered compensatory and the fair value of the discount and look back provision are estimated using the Black-Scholes option-pricing model and recognized over the six month withholding period prior to purchase. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2014-9, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-9”). ASU 2014-9 outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. The FASB subsequently issued additional clarifying standards to address issues arising from implementation of the new revenue standard, including a one-year deferral of the effective date for the new revenue standard. Public companies should now apply the guidance in ASU 2014-9 to annual reporting periods beginning after December 15, 2017 and interim periods within those annual periods. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim periods within that annual period. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-9. The Company has not yet completed its final review of the impact of this guidance. The Company anticipates, however, applying the modified retrospective method and initially applying a cumulative effect of the standard as an adjustment to its opening retained earnings balance upon the adoption of ASU 2014-9, effective January 1, 2018. In February 2016, the FASB issued ASU No. 2016-2, Leases (Topic 842) . Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers . The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees will no longer be provided with a source of off-balance sheet financing. Publicly-traded business entities should apply the amendments in ASU 2016-2 for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years (i.e., January 1, 2019, for a calendar year entity). Early application is permitted for all publicly-traded business entities and all nonpublicly-traded business entities upon issuance. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. The Company is currently assessing the impact that adopting this new accounting guidance will have on its financial statements and footnote disclosures. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which clarifies the presentation of certain specific cash flow issues in the Statement of Cash Flows. For public companies, the amendments are effective for annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods and early adoption is permitted. This new guidance is not expected to have a material impact on the Company’s Consolidated Financial Statements. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business , in an effort to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments of this ASU are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. This new guidance will be applicable for the Company’s acquisitions on or after January 1, 2018. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of the components of collaboration revenue | Below is a summary of the components of the Company’s collaboration revenue for the three and six months ended June 30, 2017 and 2016 : Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 License revenue $ — $ 22,937 $ — $ 22,937 Research and development activity revenue 1,658 5,150 3,316 6,425 API transfer revenue — 102 — 14,545 Joint operating committee revenue 3 9 7 12 Total collaboration revenue $ 1,661 $ 28,198 $ 3,323 $ 43,919 |
Schedule of share-based compensation expense | Share-based compensation expense includes expenses related to stock options and RSUs granted to employees, non-employee directors and consultants, as well as the option granted to employees to purchase shares under the ESPP, all of which have been reported in the Company’s Statements of Operations as follows: Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Research and development $ 2,897 $ 6,383 $ 7,047 $ 11,068 General and administrative 2,091 1,926 4,005 5,573 Total $ 4,988 $ 8,309 $ 11,052 $ 16,641 |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of computation of basic and diluted net income (loss) per common share | The following table sets forth the computation of basic and diluted net income (loss) per common share for the periods indicated: Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Basic and diluted net loss per common share calculation: Net loss $ (22,204 ) $ (29,945 ) $ (65,326 ) $ (66,246 ) Weighted average common shares outstanding - basic and diluted 35,858 35,392 35,831 35,324 Net loss per share of common stock - basic and diluted $ (0.62 ) $ (0.85 ) $ (1.82 ) $ (1.88 ) |
Schedule of potentially dilutive securities that have been excluded from the computations of diluted weighted average common shares outstanding | The following potentially dilutive securities have been excluded from the computations of diluted weighted average common shares outstanding for the periods presented, as they would be anti-dilutive: Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Stock options outstanding 3,805 3,584 3,805 3,584 Restricted stock units 535 661 535 661 Total 4,340 4,245 4,340 4,245 |
Cash, Cash Equivalents and Av23
Cash, Cash Equivalents and Available for Sale Securities (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Cash, Cash Equivalents, and Short-term Investments [Abstract] | |
Summary of available for sale securities, including carrying value and estimated fair values | Available for sale securities, including carrying value and estimated fair values, are summarized as follows: As of June 30, 2017 Cost Unrealized Gains Unrealized Losses Fair Value U.S. Treasury securities $ 48,147 $ — $ (13 ) $ 48,134 Corporate debt securities 7,392 — (1 ) 7,391 Total $ 55,539 $ — $ (14 ) $ 55,525 As of December 31, 2016 Cost Unrealized Gains Unrealized Losses Fair Value U.S. Treasury securities $ 120,288 $ 6 $ (33 ) $ 120,261 Corporate debt securities 35,114 — (27 ) 35,087 Total $ 155,402 $ 6 $ (60 ) $ 155,348 |
Schedule of changes in accumulated other comprehensive income (loss) associated with the unrealized gain (loss) on available for sale securities | The changes in accumulated other comprehensive income (loss) associated with the unrealized gain (loss) on available for sale securities during the three and six months ended June 30, 2017 and June 30, 2016 were as follows: Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Beginning balance $ (222 ) $ 4 $ (212 ) $ (473 ) Current period changes in fair value before reclassifications, net of tax 36 (122 ) 26 355 Amounts reclassified from accumulated other comprehensive income (loss), net of tax — — — — Total other comprehensive income (loss) 36 (122 ) 26 355 Ending balance $ (186 ) $ (118 ) $ (186 ) $ (118 ) |
Licensing and Commercializati24
Licensing and Commercialization Agreement with Novartis Pharma AG (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of the components of the Company's collaboration revenue | Below is a summary of the components of the Company’s collaboration revenue for the three and six months ended June 30, 2017 and June 30, 2016 : Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 License revenue $ — $ 22,937 $ — $ 22,937 Research and development activity revenue 1,658 5,150 3,316 6,425 API transfer revenue — 102 — 14,545 Joint operating committee revenue 3 9 7 12 Total collaboration revenue $ 1,661 $ 28,198 $ 3,323 $ 43,919 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities that are measured at fair value on a recurring basis | The following table presents, for each of the fair value hierarchy levels required under ASC 820, the Company’s assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2017 : Fair Value Measurement Using Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets Investments in money market funds* $ 136,634 $ — $ — Investments in U.S. Treasury securities $ 48,134 $ — $ — Investments in Corporate debt securities $ — $ 7,392 $ — The following table presents, for each of the fair value hierarchy levels required under ASC 820, the Company’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2016 : Fair Value Measurement Using Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets Investments in money market funds* $ 108,096 $ — $ — Investments in U.S. Treasury securities $ 120,261 $ — $ — Investments in Corporate debt securities $ — $ 35,087 $ — * Investments in money market funds, U.S. Treasury securities and corporate debt securities with maturities less than 90 days are reflected in cash and cash equivalents in the accompanying Balance Sheets. |
Stock Option and Compensation26
Stock Option and Compensation Plans (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of the stock option activity including weighted average exercise prices, options outstanding and exercisable | A summary of the stock option activity, weighted average exercise prices, options outstanding and exercisable as of June 30, 2017 is as follows: Common Stock Options Weighted Average Exercise Price Outstanding, December 31, 2016 3,359 $ 39.92 Granted 1,231 $ 4.33 Exercised (20 ) $ 1.64 Expired or forfeited (765 ) $ 41.96 Outstanding, June 30, 2017 3,805 $ 28.18 Options exercisable at June 30, 2017 1,831 Weighted average grant date fair value (per share) of options granted during the period $ 3.00 |
Summary of the stock options outstanding and exercisable by range of exercise prices | A summary of the stock options outstanding and exercisable as of June 30, 2017 is as follows: As of June 30, 2017 Options Outstanding Options Exercisable Range of Exercise Prices Total Options Outstanding Weighted Average Remaining Life (Years) Weighted Average Exercise Price Number Exercisable Weighted Average Exercise Price $0.12-$10.03 1,346 9.0 $ 4.72 181 $ 7.25 $10.04-$20.00 255 6.0 $ 13.46 196 $ 13.51 $20.01-$30.00 127 6.4 $ 25.13 112 $ 25.12 $30.01-$40.00 910 6.1 $ 32.70 779 $ 32.84 $40.01-$55.00 754 8.0 $ 46.43 390 $ 45.83 $55.01-$73.22 413 8.5 $ 71.41 173 $ 70.78 3,805 7.8 $ 28.18 1,831 $ 34.12 Aggregate Intrinsic Value $ 83 $ 78 |
Schedule of cash proceeds from, and the aggregate intrinsic value of, stock options exercised | Cash proceeds from, and the aggregate intrinsic value of, stock options exercised during the three and six months ended June 30, 2017 and 2016 , respectively, were as follows: Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Cash proceeds from options exercised $ 15 $ 3,039 $ 46 $ 3,808 Aggregate intrinsic value of options exercised $ 6 $ 5,206 $ 43 $ 7,421 |
Summary of outstanding RSU awards | The following table presents a summary of the Company’s outstanding RSU awards granted as of June 30, 2017 : Restricted Stock Units Weighted Average Grant-Date Fair Value Outstanding, December 31, 2016 721 $ 55.33 Awarded 248 $ 4.42 Vested (174 ) $ 31.75 Forfeited (260 ) $ 50.32 Outstanding, June 30, 2017 535 $ 38.03 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment as of June 30, 2017 and December 31, 2016 were as follows: Useful Life (Years) June 30, December 31, 2016 Manufacturing and clinical equipment 7 - 10 $ 412 $ 617 Computer, software and other office equipment 5 1,711 1,711 Furniture and fixtures 1 - 7 774 774 Leasehold improvements 1 - 5 1,835 1,835 4,732 4,937 Accumulated depreciation (2,844 ) (1,656 ) Property and equipment, net $ 1,888 $ 3,281 |
Restructuring Activities (Table
Restructuring Activities (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Reconciliation of severance-related accrual activity | The following is a reconciliation of the severance-related accrual activity for the six months ended June 30, 2017: Accrued Severance and Other Employee Costs Beginning Balance $ — Accrued restructuring expenses 10,006 Payments (8,039 ) Ending Balance $ 1,967 |
Business (Details)
Business (Details) | 6 Months Ended | |
Jun. 30, 2017candidate | Dec. 31, 2016trial | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Number of product candidates | candidate | 2 | |
Phase Three Trials Failure to Meet Primary Endpoint | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Number of trials completed | 2 | |
Phase Three Clinical Trial | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Number of trials completed | 3 |
Summary of Significant Accoun30
Summary of Significant Accounting Policies - Segment and Geographic Information (Details) | 6 Months Ended |
Jun. 30, 2017segment | |
Accounting Policies [Abstract] | |
Number of operating segments | 1 |
Number of reporting segments | 1 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies - Cash and Cash Equivalents (Details) $ in Millions | Jun. 30, 2017USD ($) |
Accounting Policies [Abstract] | |
Cash, cash equivalents and available for sale securities | $ 196.4 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies - Collaboration Revenue (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 22 Months Ended | |||||
Jun. 30, 2016USD ($) | Mar. 31, 2015USD ($) | Sep. 30, 2014USD ($) | May 31, 2014USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)category | Jun. 30, 2016USD ($) | Jun. 30, 2016USD ($) | |
Components of collaboration revenue | |||||||||
Total collaboration revenue | $ 1,661 | $ 28,198 | $ 3,323 | $ 43,919 | |||||
Number of categories for milestones | category | 3 | ||||||||
License revenue | |||||||||
Components of collaboration revenue | |||||||||
Total collaboration revenue | 0 | 22,937 | $ 0 | 22,937 | |||||
Research and development activity revenue | |||||||||
Components of collaboration revenue | |||||||||
Total collaboration revenue | 1,658 | 5,150 | 3,316 | 6,425 | |||||
API transfer revenue | |||||||||
Components of collaboration revenue | |||||||||
Total collaboration revenue | 0 | 102 | 0 | 14,545 | |||||
Joint operating committee revenue | |||||||||
Components of collaboration revenue | |||||||||
Total collaboration revenue | $ 3 | $ 9 | $ 7 | $ 12 | |||||
Novartis Pharma AG | Licensing and Commercialization Agreement | |||||||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||||||
Upfront fees received | $ 200,000 | ||||||||
Novartis Pharma AG | Licensing and Commercialization Agreement | Achievement of specified patient enrollment milestones | |||||||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||||||
Enrollment-based milestone revenue achieved | $ 30,000 | $ 50,000 | $ 50,000 | 30,000 | $ 130,000 | ||||
Milestone payment received | $ 130,000 | $ 130,000 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies - Property and Equipment (Details) | 6 Months Ended |
Jun. 30, 2017 | |
Minimum | |
Property and equipment | |
Estimated useful lives | 3 years |
Maximum | |
Property and equipment | |
Estimated useful lives | 10 years |
Summary of Significant Accoun34
Summary of Significant Accounting Policies - Share-Based Compensation (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Apr. 30, 2016 | |
Accounting Policies [Abstract] | |||||
Dividend yield (as a percent) | 0.00% | ||||
Share-Based Compensation | |||||
Share-based compensation expense | $ 4,988,000 | $ 8,309,000 | $ 11,052,000 | $ 16,641,000 | |
Research and development | |||||
Share-Based Compensation | |||||
Share-based compensation expense | 2,897,000 | 6,383,000 | 7,047,000 | 11,068,000 | |
General and administrative | |||||
Share-Based Compensation | |||||
Share-based compensation expense | $ 2,091,000 | 1,926,000 | 4,005,000 | 5,573,000 | |
ESPP | |||||
Share-Based Compensation | |||||
Share-based compensation expense | $ 0 | $ 100,000 | $ 0 | ||
ESPP | Maximum | |||||
Share-Based Compensation | |||||
Number of shares reserved for issuance under the Plan (in shares) | 1,000,000 |
Net Loss Per Common Share (Deta
Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Basic and diluted net loss per common share calculation: | ||||
Net loss | $ (22,204) | $ (29,945) | $ (65,326) | $ (66,246) |
Weighted average common shares outstanding - basic and diluted (in shares) | 35,858 | 35,392 | 35,831 | 35,324 |
Net loss per share of common stock - basic and diluted (in dollars per share) | $ (0.62) | $ (0.85) | $ (1.82) | $ (1.88) |
Anti-dilutive securities | ||||
Total (in shares) | 4,340 | 4,245 | 4,340 | 4,245 |
Stock options outstanding | ||||
Anti-dilutive securities | ||||
Total (in shares) | 3,805 | 3,584 | 3,805 | 3,584 |
Restricted stock units | ||||
Anti-dilutive securities | ||||
Total (in shares) | 535 | 661 | 535 | 661 |
Cash, Cash Equivalents and Av36
Cash, Cash Equivalents and Available for Sale Securities (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | |
Cash, Cash Equivalents, and Short-term Investments [Abstract] | ||
Cash | $ 4,300,000 | $ 25,800,000 |
Investments in money market funds, U.S. Treasury Securities and certain short-term investment-grade corporate debt securities with original maturities of 90 days or less | 136,600,000 | 108,100,000 |
Fair Value | 55,525,000 | 155,348,000 |
Available for sale securities with maturities of less than one year | 55,525,000 | $ 155,348,000 |
Available for sale securities with maturities of greater than one year | 0 | |
Other than temporary losses in fair value, available for sale securities | $ 0 |
Cash, Cash Equivalents and Av37
Cash, Cash Equivalents and Available for Sale Securities - Summary of Available for Sale Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Available for sale securities, including carrying value and estimated fair values | ||
Cost | $ 55,539 | $ 155,402 |
Unrealized Gains | 0 | 6 |
Unrealized Losses | (14) | (60) |
Fair Value | 55,525 | 155,348 |
U.S. Treasury securities | ||
Available for sale securities, including carrying value and estimated fair values | ||
Cost | 48,147 | 120,288 |
Unrealized Gains | 0 | 6 |
Unrealized Losses | (13) | (33) |
Fair Value | 48,134 | 120,261 |
Corporate debt securities | ||
Available for sale securities, including carrying value and estimated fair values | ||
Cost | 7,392 | 35,114 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (1) | (27) |
Fair Value | $ 7,391 | $ 35,087 |
Cash, Cash Equivalents and Av38
Cash, Cash Equivalents and Available for Sale Securities - Schedule of Changes in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Changes in accumulated other comprehensive income (loss) | ||||
Beginning balance | $ (94,618) | |||
Current period changes in fair value before reclassifications, net of tax | $ 36 | $ (122) | 26 | $ 355 |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 0 | 0 | 0 | 0 |
Other comprehensive income (loss) | 36 | (122) | 26 | 355 |
Ending balance | (148,820) | (148,820) | ||
Accumulated Other Comprehensive Income (Loss) | ||||
Changes in accumulated other comprehensive income (loss) | ||||
Beginning balance | (222) | 4 | (212) | (473) |
Ending balance | $ (186) | $ (118) | $ (186) | $ (118) |
Licensing and Commercializati39
Licensing and Commercialization Agreement with Novartis Pharma AG (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 22 Months Ended | |||||
Jun. 30, 2016USD ($) | Mar. 31, 2015USD ($) | Sep. 30, 2014USD ($) | May 31, 2014USD ($)milestone | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2016USD ($) | |
Agreement | |||||||||
Total collaboration revenue | $ 1,661 | $ 28,198 | $ 3,323 | $ 43,919 | |||||
License revenue | |||||||||
Agreement | |||||||||
Total collaboration revenue | 0 | 22,937 | 0 | 22,937 | |||||
Research and development activity revenue | |||||||||
Agreement | |||||||||
Total collaboration revenue | 1,658 | 5,150 | 3,316 | 6,425 | |||||
API transfer revenue | |||||||||
Agreement | |||||||||
Total collaboration revenue | 0 | 102 | 0 | 14,545 | |||||
Joint operating committee revenue | |||||||||
Agreement | |||||||||
Total collaboration revenue | 3 | $ 9 | 7 | $ 12 | |||||
Licensing and Commercialization Agreement | Novartis Pharma AG | |||||||||
Agreement | |||||||||
Upfront fees received | $ 200,000 | ||||||||
Licensing and Commercialization Agreement | Novartis Pharma AG | Research and development activity revenue | |||||||||
Agreement | |||||||||
Deferred revenue | 206,700 | 206,700 | |||||||
Licensing and Commercialization Agreement | Novartis Pharma AG | Research and development activity revenue | Up-front payment | |||||||||
Agreement | |||||||||
Deferred revenue | 200,000 | 200,000 | |||||||
Licensing and Commercialization Agreement | Novartis Pharma AG | Research and development activity revenue | Ongoing performance obligations | |||||||||
Agreement | |||||||||
Deferred revenue | $ 6,700 | $ 6,700 | |||||||
Licensing and Commercialization Agreement | Novartis Pharma AG | Achievement of specified patient enrollment milestones | |||||||||
Agreement | |||||||||
Number of milestones | milestone | 2 | ||||||||
Enrollment-based milestone revenue achieved | $ 30,000 | $ 50,000 | $ 50,000 | $ 30,000 | $ 130,000 | ||||
Milestone payment received | 130,000 | $ 130,000 | |||||||
Licensing and Commercialization Agreement | Novartis Pharma AG | Achievement of specified patient enrollment milestones | Maximum | |||||||||
Agreement | |||||||||
Aggregate amount receivable on achievement of milestone | 50,000 | ||||||||
Licensing and Commercialization Agreement | Novartis Pharma AG | Achievement of specified regulatory approval milestones | Maximum | |||||||||
Agreement | |||||||||
Aggregate amount receivable on achievement of milestone | 300,000 | ||||||||
Licensing and Commercialization Agreement | Novartis Pharma AG | Achievement of specified commercial sales milestone | Maximum | |||||||||
Agreement | |||||||||
Aggregate amount receivable on achievement of milestone | $ 400,000 |
Financing Agreement with Novo40
Financing Agreement with Novo A/S (Details) | 1 Months Ended | 19 Months Ended | ||||
Nov. 30, 2014USD ($) | Jan. 31, 2014USD ($) | May 31, 2013USD ($)tranchepurchase | Nov. 30, 2014USD ($) | Jun. 30, 2017USD ($) | Dec. 31, 2016USD ($) | |
Agreement | ||||||
Royalty purchase liability | $ 125,000,000 | $ 125,000,000 | ||||
Novo A/S | Novo Agreement | Fovista, Fovista-Related Products, and Other Products | ||||||
Agreement | ||||||
Number of tranches in financing | tranche | 3 | |||||
Aggregate royalty rights | $ 125,000,000 | |||||
Number of separate purchases provided for in financing agreement | purchase | 3 | |||||
Proceeds from royalty purchase agreement | $ 41,700,000 | $ 41,700,000 | $ 41,700,000 | $ 125,000,000 | ||
Royalty purchase liability | $ 125,000,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Operating Loss Carryforwards [Line Items] | |||||
Benefit from income taxes | $ 1 | $ 260 | $ (2) | $ 228 | |
Domestic Tax Authority | |||||
Operating Loss Carryforwards [Line Items] | |||||
Federal net operating loss carryforwards | $ 187,400 | ||||
Refunds claimed on amended tax returns | $ 8,400 | $ 8,400 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Fair Value Measurements | ||
Investments in U.S. Treasury securities and Corporate debt securities | $ 55,525,000 | $ 155,348,000 |
Transfer of assets from Level 1 to Level 2 of the fair value measurement hierarchy | 0 | |
Transfer of assets from Level 2 to Level 1 of the fair value measurement hierarchy | 0 | |
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1) | Money market funds | ||
Fair Value Measurements | ||
Investments in money market funds, U.S. Treasury securities and corporate debt securities with maturities less than 90 days | 136,634,000 | 108,096,000 |
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1) | U.S. Treasury securities | ||
Fair Value Measurements | ||
Investments in U.S. Treasury securities and Corporate debt securities | 48,134,000 | 120,261,000 |
Fair Value, Measurements, Recurring | Quoted prices in active markets for identical assets (Level 1) | Corporate debt securities | ||
Fair Value Measurements | ||
Investments in U.S. Treasury securities and Corporate debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Money market funds | ||
Fair Value Measurements | ||
Investments in money market funds, U.S. Treasury securities and corporate debt securities with maturities less than 90 days | 0 | 0 |
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | U.S. Treasury securities | ||
Fair Value Measurements | ||
Investments in U.S. Treasury securities and Corporate debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Significant other observable inputs (Level 2) | Corporate debt securities | ||
Fair Value Measurements | ||
Investments in U.S. Treasury securities and Corporate debt securities | 7,392,000 | 35,087,000 |
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Money market funds | ||
Fair Value Measurements | ||
Investments in money market funds, U.S. Treasury securities and corporate debt securities with maturities less than 90 days | 0 | 0 |
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | U.S. Treasury securities | ||
Fair Value Measurements | ||
Investments in U.S. Treasury securities and Corporate debt securities | 0 | 0 |
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3) | Corporate debt securities | ||
Fair Value Measurements | ||
Investments in U.S. Treasury securities and Corporate debt securities | $ 0 | $ 0 |
Stock Option and Compensation43
Stock Option and Compensation Plans - Stock Incentive Plans and Stock Option Activity Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 6 Months Ended | ||
Jan. 31, 2017 | Apr. 30, 2016 | Aug. 31, 2013 | Jun. 30, 2017 | |
Options outstanding, net of estimated forfeitures, vested or expected to vest | ||||
Options outstanding (in shares) | 3,537,000 | |||
Weighted average exercise price (in dollars per share) | $ 28.73 | |||
Weighted average remaining contractual life | 7 years 8 months 22 days | |||
Aggregate intrinsic value | $ 0.1 | |||
ESPP | ||||
Stock Option and Compensation Plans | ||||
Number of shares of common stock available for issuance under the Plan (in shares) | 995,254 | |||
Purchase price of common stock as percentage of fair market value | 85.00% | |||
Maximum | ESPP | ||||
Stock Option and Compensation Plans | ||||
Number of shares reserved for issuance under the Plan (in shares) | 1,000,000 | |||
2013 Plan | ||||
Stock Option and Compensation Plans | ||||
Number of shares of common stock available for issuance under the Plan (in shares) | 1,927,000 | |||
Annual increase in shares reserved for issuance under the Plan (in shares) | 2,542,372 | |||
Annual increase in shares reserved for issuance under the Plan (as a percent) | 4.00% | 4.00% | ||
Increase in number of shares available under the Plan (in shares) | 1,429,000 | 5,454,000 | ||
2013 Plan | Maximum | ||||
Stock Option and Compensation Plans | ||||
Number of shares reserved for issuance under the Plan (in shares) | 3,359,641 | |||
2007 Plan | ||||
Stock Option and Compensation Plans | ||||
Number of shares of common stock available for issuance under the Plan (in shares) | 739,317 |
Stock Option and Compensation44
Stock Option and Compensation Plans - Summary of Stock Option Activity (Details) shares in Thousands | 6 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Common Stock Options | |
Outstanding, beginning of period (in shares) | shares | 3,359 |
Granted (in shares) | shares | 1,231 |
Exercised (in shares) | shares | (20) |
Expired or forfeited (in shares) | shares | (765) |
Outstanding, end of period (in shares) | shares | 3,805 |
Weighted Average Exercise Price | |
Outstanding, beginning of period (in dollars per share) | $ / shares | $ 39.92 |
Granted (in dollars per share) | $ / shares | 4.33 |
Exercised (in dollars per share) | $ / shares | 1.64 |
Expired or forfeited (in dollars per share) | $ / shares | 41.96 |
Outstanding, end of period (in dollars per share) | $ / shares | $ 28.18 |
Options exercisable at end of period (in shares) | shares | 1,831 |
Weighted average grant date fair value (per share) of options granted during the period (in dollars per share) | $ / shares | $ 3 |
Stock Option and Compensation45
Stock Option and Compensation Plans - Options Outstanding and Exercisable by Exercise Price and Options Exercised (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended |
Jun. 30, 2017USD ($)$ / sharesshares | |
Options Outstanding | |
Total Options Outstanding (in shares) | shares | 3,805 |
Weighted Average Remaining Life (Years) | 7 years 9 months 7 days |
Weighted Average Exercise Price (in dollars per share) | $ 28.18 |
Aggregate Intrinsic Value of Options Outstanding | $ | $ 83 |
Options Exercisable | |
Number Exercisable (in shares) | shares | 1,831 |
Weighted Average Exercise Price (in dollars per share) | $ 34.12 |
Aggregate Intrinsic Value of Options Exercisable | $ | $ 78 |
$0.12-$10.03 | |
Options Outstanding | |
Total Options Outstanding (in shares) | shares | 1,346 |
Weighted Average Remaining Life (Years) | 9 years 1 day |
Weighted Average Exercise Price (in dollars per share) | $ 4.72 |
Options Exercisable | |
Number Exercisable (in shares) | shares | 181 |
Weighted Average Exercise Price (in dollars per share) | $ 7.25 |
Exercise prices, low end of range (in dollars per share) | 0.12 |
Exercise prices, high end of range (in dollars per share) | $ 10.03 |
$10.04-$20.00 | |
Options Outstanding | |
Total Options Outstanding (in shares) | shares | 255 |
Weighted Average Remaining Life (Years) | 5 years 11 months 26 days |
Weighted Average Exercise Price (in dollars per share) | $ 13.46 |
Options Exercisable | |
Number Exercisable (in shares) | shares | 196 |
Weighted Average Exercise Price (in dollars per share) | $ 13.51 |
Exercise prices, low end of range (in dollars per share) | 10.04 |
Exercise prices, high end of range (in dollars per share) | $ 20 |
$20.01-$30.00 | |
Options Outstanding | |
Total Options Outstanding (in shares) | shares | 127 |
Weighted Average Remaining Life (Years) | 6 years 4 months 13 days |
Weighted Average Exercise Price (in dollars per share) | $ 25.13 |
Options Exercisable | |
Number Exercisable (in shares) | shares | 112 |
Weighted Average Exercise Price (in dollars per share) | $ 25.12 |
Exercise prices, low end of range (in dollars per share) | 20.01 |
Exercise prices, high end of range (in dollars per share) | $ 30 |
$30.01-$40.00 | |
Options Outstanding | |
Total Options Outstanding (in shares) | shares | 910 |
Weighted Average Remaining Life (Years) | 6 years 26 days |
Weighted Average Exercise Price (in dollars per share) | $ 32.70 |
Options Exercisable | |
Number Exercisable (in shares) | shares | 779 |
Weighted Average Exercise Price (in dollars per share) | $ 32.84 |
Exercise prices, low end of range (in dollars per share) | 30.01 |
Exercise prices, high end of range (in dollars per share) | $ 40 |
$40.01-$55.00 | |
Options Outstanding | |
Total Options Outstanding (in shares) | shares | 754 |
Weighted Average Remaining Life (Years) | 8 years 11 days |
Weighted Average Exercise Price (in dollars per share) | $ 46.43 |
Options Exercisable | |
Number Exercisable (in shares) | shares | 390 |
Weighted Average Exercise Price (in dollars per share) | $ 45.83 |
Exercise prices, low end of range (in dollars per share) | 40.01 |
Exercise prices, high end of range (in dollars per share) | $ 55 |
$55.01-$73.22 | |
Options Outstanding | |
Total Options Outstanding (in shares) | shares | 413 |
Weighted Average Remaining Life (Years) | 8 years 6 months 15 days |
Weighted Average Exercise Price (in dollars per share) | $ 71.41 |
Options Exercisable | |
Number Exercisable (in shares) | shares | 173 |
Weighted Average Exercise Price (in dollars per share) | $ 70.78 |
Exercise prices, low end of range (in dollars per share) | 55.01 |
Exercise prices, high end of range (in dollars per share) | $ 73.22 |
Stock Option and Compensation46
Stock Option and Compensation Plans - Schedule of Cash Proceeds From and Aggregate Intrinsic Value of Stock Options Exercised (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Cash proceeds from options exercised | $ 15 | $ 3,039 | $ 46 | $ 3,808 |
Aggregate intrinsic value of options exercised | $ 6 | $ 5,206 | $ 43 | $ 7,421 |
Stock Option and Compensation47
Stock Option and Compensation Plans - Stock Compensation Expense (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Stock Option and Compensation Plans | ||||
Share-based compensation expense | $ 4,988,000 | $ 8,309,000 | $ 11,052,000 | $ 16,641,000 |
Stock options | Employees | ||||
Stock Option and Compensation Plans | ||||
Share-based compensation expense | 3,600,000 | 5,500,000 | 8,000,000 | 11,600,000 |
Unrecognized share-based compensation costs for option awards, net of estimated forfeitures | 19,600,000 | $ 19,600,000 | ||
Expected weighted average period to recognize share-based compensation costs | 2 years 3 months 18 days | |||
Non-employee Options | Consultants | ||||
Stock Option and Compensation Plans | ||||
Share-based compensation expense | 100,000 | 500,000 | $ 200,000 | 900,000 |
Unrecognized share-based compensation costs for option awards, net of estimated forfeitures | $ 300,000 | $ 300,000 | ||
Expected weighted average period to recognize share-based compensation costs | 2 years 1 month 13 days | |||
Restricted stock units | ||||
Stock Option and Compensation Plans | ||||
RSUs expected to vest (in shares) | 365,000 | 365,000 | ||
Weighted average fair value of RSUs expected to vest (in dollars per share) | $ 31.83 | $ 31.83 | ||
Aggregate intrinsic value of RSUs expected to vest | $ 900,000 | $ 900,000 | ||
Number of shares granted (in shares) | 248,000 | |||
Restricted stock units | Employees | ||||
Stock Option and Compensation Plans | ||||
Share-based compensation expense | 1,300,000 | $ 2,300,000 | $ 2,600,000 | $ 4,100,000 |
Expected weighted average period to recognize share-based compensation costs | 2 years 4 months 28 days | |||
Unrecognized compensation costs, net of estimated forfeitures | 8,900,000 | $ 8,900,000 | ||
Restricted stock units | Consultants | ||||
Stock Option and Compensation Plans | ||||
Expected weighted average period to recognize share-based compensation costs | 2 years 2 months 18 days | |||
Unrecognized compensation costs, net of estimated forfeitures | $ 100,000 | $ 100,000 | ||
Number of shares granted (in shares) | 0 | 0 | ||
ESPP | ||||
Stock Option and Compensation Plans | ||||
Share-based compensation expense | $ 0 | $ 100,000 | $ 0 | |
Expected weighted average period to recognize share-based compensation costs | 3 months | |||
Shares of common stock issued under plan (in shares) | 4,746 | 0 | ||
Number of shares available for future purchases under the plan (in shares) | 995,254 | 995,254 |
Stock Option and Compensation48
Stock Option and Compensation Plans - Summary of Outstanding RSU Awards Granted (Details) - Restricted stock units shares in Thousands | 6 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Restricted Stock Units | |
Outstanding, beginning of period (in shares) | shares | 721 |
Awarded (in shares) | shares | 248 |
Vested (in shares) | shares | (174) |
Forfeited (in shares) | shares | (260) |
Outstanding, end of period (in shares) | shares | 535 |
Weighted Average Grant-Date Fair Value | |
Outstanding, beginning of period (in dollars per share) | $ / shares | $ 55.33 |
Awarded (in dollars per share) | $ / shares | 4.42 |
Vested (in dollars per share) | $ / shares | 31.75 |
Forfeited (in dollars per share) | $ / shares | 50.32 |
Outstanding, end of period (in dollars per share) | $ / shares | $ 38.03 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Property and Equipment | |||||
Property and equipment, gross | $ 4,732 | $ 4,732 | $ 4,937 | ||
Accumulated depreciation | (2,844) | (2,844) | (1,656) | ||
Property and equipment, net | 1,888 | 1,888 | 3,281 | ||
Depreciation expense | 600 | $ 200 | $ 1,393 | $ 352 | |
Minimum | |||||
Property and Equipment | |||||
Useful life | 3 years | ||||
Maximum | |||||
Property and Equipment | |||||
Useful life | 10 years | ||||
Manufacturing and clinical equipment | |||||
Property and Equipment | |||||
Property and equipment, gross | 412 | $ 412 | 617 | ||
Manufacturing and clinical equipment | Minimum | |||||
Property and Equipment | |||||
Useful life | 7 years | ||||
Manufacturing and clinical equipment | Maximum | |||||
Property and Equipment | |||||
Useful life | 10 years | ||||
Computer, software and other office equipment | |||||
Property and Equipment | |||||
Useful life | 5 years | ||||
Property and equipment, gross | 1,711 | $ 1,711 | 1,711 | ||
Furniture and fixtures | |||||
Property and Equipment | |||||
Property and equipment, gross | 774 | $ 774 | 774 | ||
Furniture and fixtures | Minimum | |||||
Property and Equipment | |||||
Useful life | 1 year | ||||
Furniture and fixtures | Maximum | |||||
Property and Equipment | |||||
Useful life | 7 years | ||||
Leasehold improvements | |||||
Property and Equipment | |||||
Property and equipment, gross | $ 1,835 | $ 1,835 | $ 1,835 | ||
Leasehold improvements | Minimum | |||||
Property and Equipment | |||||
Useful life | 1 year | ||||
Leasehold improvements | Maximum | |||||
Property and Equipment | |||||
Useful life | 5 years |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 1 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2017 | |
Acquisition agreement | OSI Pharmaceuticals | PDGF Licensed Products | ||
Commitments and contingencies | ||
Amount to be paid on achievement of milestone | $ 12,000,000 | |
License Agreements | Archemix | PDGF Licensed Products | ||
Commitments and contingencies | ||
Royalty payable | 0 | |
License Agreements | Archemix | Fovista | Achievement of specified clinical and regulatory milestones | Maximum | ||
Commitments and contingencies | ||
Amount to be paid on achievement of milestone | 14,000,000 | |
License Agreements | Archemix | Fovista | Achievement of specified commercial milestones | Maximum | ||
Commitments and contingencies | ||
Amount to be paid on achievement of milestone | 3,000,000 | |
License Agreements | Archemix | Other anti-PDGF aptamer | Achievement of specified clinical and regulatory milestones | Maximum | ||
Commitments and contingencies | ||
Amount to be paid on achievement of milestone | 18,800,000 | |
License Agreements | Archemix | Other anti-PDGF aptamer | Achievement of specified commercial milestones | Maximum | ||
Commitments and contingencies | ||
Amount to be paid on achievement of milestone | 3,000,000 | |
License Agreements | Archemix | C5 Licensed Product | ||
Commitments and contingencies | ||
Royalty payable | 0 | |
License Agreements | Archemix | C5 Licensed Product | Achievement of specified commercial milestones | Maximum | ||
Commitments and contingencies | ||
Amount to be paid on achievement of milestone | 22,500,000 | |
License Agreements | Archemix | C5 Licensed Product | Achievement of specified development, clinical and regulatory milestones | Maximum | ||
Commitments and contingencies | ||
Amount to be paid on achievement of milestone | 57,500,000 | |
Supply Agreement | Nektar | ||
Commitments and contingencies | ||
Payment upon entry into Novartis Agreement | $ 19,800,000 | |
Supply Agreement | Nektar | Fovista | Achievement of specified clinical and regulatory milestones | Maximum | ||
Commitments and contingencies | ||
Amount to be paid on achievement of milestone | 6,500,000 | |
Supply Agreement | Nektar | Fovista | Achievement of specified commercial milestones | ||
Commitments and contingencies | ||
Amount to be paid on achievement of milestone | $ 3,000,000 |
Restructuring Activities (Detai
Restructuring Activities (Details) $ in Thousands | Jan. 26, 2017USD ($) | Jan. 31, 2017USD ($) | Sep. 30, 2017USD ($)employee | Jun. 30, 2017USD ($)employee | Jun. 30, 2017USD ($)employee | Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($) |
Severance and other employee costs | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Number of employee positions eliminated in reduction of personnel | employee | 98 | 98 | |||||
Cash expenditures related to reduction in personnel | $ 8,039 | ||||||
Costs related to reduction in personnel | $ 1,800 | 10,500 | |||||
Accrual balance for restructuring activity | 1,967 | 1,967 | $ 0 | ||||
Accrued restructuring expenses | 10,006 | ||||||
Severance and other employee costs | Research and development | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Costs related to reduction in personnel | 1,100 | 5,900 | |||||
Severance and other employee costs | General and administrative | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Costs related to reduction in personnel | $ 700 | $ 4,600 | |||||
Lease termination costs | One Penn Plaza LLC | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Accrued restructuring expenses | $ 900 | ||||||
Lease termination costs | Otsuka America Pharmaceutical, Inc. | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Accrued restructuring expenses | $ 1,200 | ||||||
Lease termination costs | General and administrative | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Accrued restructuring expenses | $ 2,100 | ||||||
Subsequent Event | Forecast | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Expected costs | $ 13,400 | $ 13,400 | |||||
Costs expected to result in future cash expenditures | $ 12,500 | ||||||
Subsequent Event | Forecast | Severance and other employee costs | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Percent of personnel expected to be effected by reduction in workforce | 80.00% | 80.00% | |||||
Number of employee positions remaining expected to be affected by reduction in personnel | employee | 20 | ||||||
Expected costs | $ 11,300 | $ 11,300 | |||||
Subsequent Event | Forecast | Lease termination costs | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Expected costs | $ 2,100 | $ 2,100 |
Restructuring Activities - Reco
Restructuring Activities - Reconciliation of Severance-related Accrual Activity (Details) - Accrued Severance and Other Employee Costs $ in Thousands | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | $ 0 |
Accrued restructuring expenses | 10,006 |
Payments | (8,039) |
Ending Balance | $ 1,967 |
Subsequent Event (Details)
Subsequent Event (Details) | Jul. 03, 2017 |
Subsequent Event | Novartis Pharma AG | Licensing and Commercialization Agreement | |
Subsequent Event [Line Items] | |
Percent of cost and expense of clinical trials each party will be required to fund if unable to agree on funding | 50.00% |